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Tuesday 17 November 2015
Campton Man Sentenced to Year in Prison for Manufacturing MarijuanaRead the Press Release
CONCORD, N.H. - Peter Apicelli, 31, of Campton, N.H., was sentenced in the United States District Court for the District of New Hampshire on one count of manufacturing marijuana, announced Acting United States Attorney Donald Feith. Senior U.S. District Judge Joseph DiClerico imposed a sentence of 12 months and a day imprisonment, 2 years supervised release, and a mandatory special assessment of $100.
A federal jury in Concord found Apicelli guilty of federal marijuana manufacturing charges following a three day trial in July 2015.
According to the evidence at trial, in September 2013, Apicelli was renting a property in Campton, N.H. Following a tip, law enforcement investigated and found an outdoor marijuana grow on the property about 200 yards from the residence. A law enforcement temporary surveillance camera then captured video of a male individual wearing a red back-pack and tan shorts tending to the plants on September 14. After obtaining a search warrant for the house, police located an indoor marijuana grow in the basement, drying marijuana, packaged marijuana, scales and other packaging materials, as well as evidence indicating that Apicelli lived there, including a red back-pack and tan shorts. All told, over 120 marijuana plants were seized from the house and grounds.
Apicelli was ordered to surrender to the Bureau of Prisons on January 8, 2016.
This matter was jointly investigated by the Campton Police Department, the Grafton County Sheriff’s Office, and the New Hampshire State Drug Task Force, with assistance from the New Hampshire State Police Forensic Laboratory. The case is being prosecuted by Assistant U.S. Attorney Charles L. Rombeau.
California Woman Admits Scheme to Steal 94,000 Debit and Credit Cards from Michaels’ Stores in 19 StatesRead the Press Release
CAMDEN, N.J. – A California woman today admitted her role in a large-scale conspiracy to steal 94,000 credit and debit cards from customers at approximately 80 Michaels’ Stores in 19 states and to then use that information to make fraudulent withdrawals from the bank accounts of those customers, U.S. Attorney Paul J. Fishman announced.
Crystal Banuelos, 28, of Bloomington, California, pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to Count One of the indictment, conspiracy to commit bank fraud, and Count Three of the indictment, aggravated identity theft.
According to documents filed in this case and statements made in court:
The conspirators installed devices that acquired customers’ bank account and personal identification number (PIN) information on point of sale (POS) terminals at stores operated by Michaels. The stolen account information was used to produce counterfeit bank cards, which were used with the stolen PINs to withdraw funds from the compromised bank accounts.
The conspirators allegedly replaced 88 POS terminals in 80 different stores operated by Michaels across 19 states, including New Jersey, with counterfeit POS devices. Each counterfeit device was equipped with wireless technology, which the conspirators used to retrieve the stolen information. From February 2011 to April 2011, conspirators stole approximately 94,000 debit and credit card account numbers.
From April 2011 to May 2011, Banuelos, her co-defendant, Angel Angulo, and others obtained counterfeit cards with the corresponding PIN numbers written on them from other conspirators. They used the cards and PIN numbers to withdraw money using automated teller machines (ATMs) from hundreds of bank accounts. On May 14, 2011, Banuelos and Angulo possessed 179 counterfeit cards in New Jersey.
The charge of conspiracy to commit bank fraud carries a maximum potential penalty of 30 years in prison and a $1 million fine. The charge of aggravated identity theft carries a mandatory penalty of two years in prison, to be served consecutively to any other sentence. Banuelos also consented to an order of forfeiture in the amount of $480,300, representing the proceeds of the offense. Her sentencing is scheduled for Feb. 23, 2016.
U.S. Attorney Fishman credited special agents of the U.S. Secret Service, under the direction of Special Agent in Charge David Beach, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Daniel Shapiro of the Computer Hacking and Intellectual Property Section of the U.S. Attorney’s Office Economic Crimes Unit.
Defense counsel: Edward Sapone Esq., New York
Bonners Ferry Woman Pleads Guilty to Possessing Stolen MailRead the Press Release
COEUR D'ALENE - Nicole Lynn Abraham, 30, of Bonners Ferry, Idaho, pleaded guilty today to possession of stolen mail, U.S. Attorney Wendy J. Olson announced. Abraham was indicted by a federal grand jury in Coeur d'Alene on March 17, 2015.
According to the plea agreement, in June 2014, Kootenai Tribal Police executed a search warrant at a residence where the defendant was residing. During the search, a Kootenai Tribal Officer seized a suitcase containing mail stolen from individuals in Idaho, Washington and Montana. Abraham was arrested and later made bond.
A week later, Spokane police confronted Abraham who was a passenger in a stolen vehicle where more stolen mail and items taken during a home burglary were found. Abraham was arrested.
The charge of possession of stolen mail is punishable by up to five years in prison, a maximum fine of $250,000.00, and up to three years of supervised release.
Sentencing is set for January 26, 2016, before Senior U.S. District Judge Edward J. Lodge at the federal courthouse in Coeur d'Alene.
The case was investigated by Kootenai Tribal Police, U.S. Postal Inspection Service, Federal Bureau of Investigation, and the Spokane Police Department.
Bishop Man Sentenced for Possession of Child PornographyRead the Press Release
CORPUS CHRISTI, Texas – Matthew Victor Hernandez, 27, of Bishop, has been ordered to federal prison following his conviction of possession of child pornography, announced U.S. Attorney Kenneth Magidson.
Today, Senior U.S. District Judge John D. Rainey sentenced Hernandez to 84 months in prison to be immediately followed by a 10-year-term of supervised release during which time he will have to comply with numerous requirements designed to restrict his access to children and the Internet. He will also be ordered to register as a sex offender.
On Sept. 3, 2014, authorities began investigating Hernandez for allegations involving the sexual abuse of a minor girl. The victim was identified, confirmed the abuse and also reported receiving inappropriate and threatening text messages from Hernandez. A forensic examination of Hernandez’s phone led to the discovery of more than 175 images and nine videos of children involved in sexual explicit conduct. Law enforcement also located several text messages Hernandez sent to the minor girl threatening to kill her if she reported the abuse.
At the time of his arrest, Hernandez was in possession of second phone. A forensic examination of this phone led to the discovery of more than 195 images of children involved in sexual explicit conduct.
Hernandez admitted to possessing the images and sending the threatening text messages to the minor girl.
He has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The charges against Hernandez were the result of an investigation conducted by FBI, Texas Rangers and the Corpus Christi Police Department—Internet Crimes Against Children Task Force.
This case, prosecuted by Assistant U.S. Attorney Hugo R. Martinez, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Bangor Resident Pleads Guilty to Drug ChargeRead the Press Release
Contact: Joel B. Casey
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Mark Wood, 56, of Bangor pleaded guilty today in U.S. District Court to conspiring to distribute and possess with the intent to distribute bath salts.
According to court records, between about January 2012 and March 2014, the defendant conspired with others to distribute the bath salts MDPV and Alpha-PVP in Penobscot County. He obtained drugs from other conspirators and delivered them to friends and associates who paid for them. He was also paid in drugs for driving his supplier on drug deliveries and by other users and dealers who were buying drugs from his supplier.The defendant faces up to 20 years in prison, a $1,000,000 fine and supervised release of between three years and life. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The case was investigated by the Maine Drug Enforcement Agency; the U.S. Postal Inspection Service; the Bureau of Alcohol, Tobacco, Firearms and Explosives; and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.Alien Smuggler Sentenced to Three-Year Prison TermRead the Press Release
SYRACUSE, NEW YORK – Yesterday Ergys Metashi, 34, of Ontario, Canada, was sentenced to a term of three (3) years in prison, followed by a three-year term of supervised release, in connection with his conviction after trial for bringing an alien to the United States for the purpose of financial gain, announced United States Attorney Richard S. Hartunian, Homeland Security Investigations, Assistant Special Agent in Charge Nicholas DiNicola, and Timothy J. Walker, Area Port Director, U.S. Customs and Border Protection, Area Port of Alexandria Bay.
Ergys Metashi, a commercial truck driver originally from Albania who lives and works in Canada, was convicted following a July jury trial in federal court of bringing an alien to the United States from Canada through the Alexandria Bay Port of Entry, New York, on March 31, 2015. The evidence at trial showed that Metashi agreed to smuggle the alien, a fellow Albanian, into the United States by hiding him in the sleeping compartment of a tractor trailer in exchange for the promise of a payment of several thousand American dollars. During an inspection, U.S. Customs and Border Protection Officers found the alien hiding under a blanket in the truck and arrested Metashi.
This case was investigated by Homeland Security Investigations and U.S. Customs and Border Protection, and was prosecuted by Assistant United States Attorney Michael F. Perry.
Albuquerque Man Pleads Guilty to Theft Charge Arising Out of Robbery of Retail Pharmacy in August 2014Read the Press Release
ALBUQUERQUE – Roy Christopher, 28, of Albuquerque, N.M., pleaded guilty today in federal court to a theft of medical products charge arising out of the robbery of an Albuquerque-area retail pharmacy in Aug. 2014.
The guilty plea was announced by U.S. Attorney Damon P. Martinez, 2nd Judicial District Attorney Kari E. Brandenburg, Special Agent in Charge Carol K.O. Lee of the FBI’s Albuquerque Division, Special Agent in Charge Will R. Glaspy of the DEA’s El Paso Division, Chief Gorden Eden, Jr., of the Albuquerque Police Department, and Chief Pete N. Kassetas of the New Mexico State Police.
Christopher was one of six defendants charged in four indictments that were announced by federal and local officials on April 29, 2015. The indictments alleged that the six defendants robbed retail pharmacies in Albuquerque to illegally obtain Oxycodone and other highly addictive opioid painkillers. The four indictments charged Christopher and five other Albuquerque residents with crimes arising out of the armed robberies of retail pharmacies, including violations of the Controlled Substance Registrant Protection Act and the Safe Doses Act, laws passed to address the theft and diversion of prescription drugs.
Christopher was indicted on April 28, 2015, and charged with (1) violating the Hobbs Act by interfering with interstate commerce by robbery and violence; (2) violating the Safe Doses Act by theft of medical products; and (3) possession of Oxycodone with intent to distribute. The charges against Christopher arise out of the robbery of a CVS Pharmacy on Aug. 3, 2014.
During today’s proceedings, Christopher pled guilty to Count 2 of the indictment charging him with violating the Safe Doses Act by robbery involving controlled substances. In entering the guilty plea, Christopher admitted that on Aug. 3, 2014, he entered the CVS pharmacy and handed the attending pharmacy employee a note demanding Oxycodone and that the pharmacy employee complied with his demand. Christopher was apprehended shortly after the robbery. Christopher admitted that he stole more than 200 Oxycodone pills of various dosages during the robbery.
At sentencing, Christopher faces statutory maximum penalty of 20 years in federal prison. He remains in custody pending a sentencing hearing which has yet to be scheduled.
With respect to the other five defendants charged in these pharmacy robbery cases, four have entered guilty pleas and remain detained pending sentencing hearings:
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On July 1, 2015, Victor Hurtado, 20, pled guilty to felony charges arising out of the Jan. 6, 2015, armed robbery of the Smith’s Pharmacy located at 4016 Louisiana Blvd. NE in Albuquerque. Under the terms of his plea agreement, Hurtado will be sentenced to a prison term within the range of ten to 18 years.
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On Sept. 17, 2015, Valentin Garcia, 23, pled guilty to felony charges arising out of the Jan. 30, 2015, armed robbery of the CVS Pharmacy located at 4201 Montano in Albuquerque.Under the terms of his plea agreement, Garcia will be sentenced to ten years in prison.
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On Sept. 4, 2015, Blake Gallardo, 22, pled guilty to felony charges arising out of the June 6, 2015, robbery of a Walgreens Pharmacy located at 1201 Unser Blvd. NW in Albuquerque.Under the terms of his plea agreement, Gallardo will be sentenced to a prison term within the range of 15 to 20 years.
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On Sept. 24, 2015, Josephine Duran, 23, pled guilty to felony charges arising out of the June 6, 2015, robbery of a Walgreens Pharmacy located at 1201 Unser Blvd. NW in Albuquerque.Under the terms of her plea agreement, Duran will be sentenced to a prison term within the range of 48 to 100 months.
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Joseph Montano, 23, has entered a not guilty plea to an indictment arising out of the armed robbery of a Smith’s Pharmacy on Jan. 6, 2015.He remains in custody pending trial which is currently scheduled for Nov. 30, 2015.Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
These cases were investigated by the Albuquerque office of the FBI, the Tactical Diversion Squad of the DEA in Albuquerque, and the Albuquerque Police Department, with assistance from the 2nd Judicial District Attorney’s Office in Bernalillo County. The cases are being prosecuted by Assistant U.S. Attorneys Joel R. Meyers and Shaheen P. Torgoley.
DEA’s Tactical Diversion Squads combine DEA resources with those of federal, state and local law enforcement agencies in an innovative effort to investigate, disrupt and dismantle those suspected of violating the Controlled Substances Act or other appropriate federal, state or local statutes pertaining to the diversion of licit pharmaceutical controlled substances or listed chemicals.
These cases are being prosecuted pursuant to a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible. Because New Mexico’s violent crime rates, on a per capita basis, are amongst the highest in the nation, New Mexico’s law enforcement community is collaborating to target repeat offenders from counties with the highest violent crime rates, including Bernalillo County, under this initiative.
The cases also are being prosecuted pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative is a collaborative effort between the U.S. Attorney’s Office and the University of New Mexico Health Sciences Center that is partnering with the Bernalillo County Opioid Accountability Initiative with the overriding goal of reducing the number of opioid-related deaths in the District of New Mexico. The HOPE Initiative comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The law enforcement component of the HOPE Initiative is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative.
The Controlled Substance Registrant Protection Act was enacted in 1984, to combat the theft of prescription drugs from individuals and businesses registered with the DEA. It created penalties for entering a pharmacy’s premises for the purpose of stealing controlled substances, and includes enhanced punishment for using a dangerous weapon. The Safe Doses Act was enacted in Oct. 2012, to fight medical theft and protect patients from unknowingly using stolen and mishandled drugs. It provides for enhanced sentences for those who rob pharmacies of controlled substances; individuals who steal medical products; and “fences” who knowingly obtain stolen medical products for resale in the supply chain.
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25 charged in drug trafficking organizationRead the Press Release
Indianapolis--United States Attorney Josh J. Minkler and Marion County Prosecutor Terry Curry announced federal and state charges against 25 individuals in a drug trafficking conspiracy that brought pound quantities of methamphetamine and heroin into the Indianapolis area.
“Criminal organizations have the goal of infecting neighborhoods with drugs, guns and violence,” said Minkler. “It is a top priority of federal law enforcement to work with state and local law enforcement to identify, investigate and eliminate those organizations. I want to assure this community that the elimination of armed drug trafficking organizations reduces violent crime in Marion County.”
Six SWAT teams and approximately 175 federal, state and local law enforcement officials served 20 warrants all around Marion County early this morning. The raids netted over two pounds of heroin, 19 pounds of methamphetamine and 16 guns. (a stolen Kel-tec 9 mm rifle, SKS 7.62 mm rifle, sawed off shotgun and several handguns)
In March 2015, agents from the Drug Enforcement Administration (DEA) learned of a drug conspiracy bringing large quantities of red methamphetamine and heroin into the Indianapolis area. Alfonso Pineda-Hernandez and Nicolas Cazares-Garcia received large quantities of methamphetamine from sources in Mexico that were delivered to Indianapolis and then redistributed. They were also responsible for obtaining large quantities of heroin from local suppliers and redistributing the drug through subordinate distributors.
The defendants used cellular phones to maintain contact with one another during the conspiracy. Cazares-Garcia, Pineda-Hernandez and others, used cell phones to maintain contact with suppliers of controlled substances in Mexico. They discussed the availability and prices of methamphetamine and heroin, arranged for deliveries of the drugs and arranged for payment of drugs which had already been delivered. They used multiple cell phones simultaneously and changed phones frequently, using different numbers to communicate by voice and text.
“A big part of public safety depends upon the disruption and dismantlement of heroin drug-trafficking networks,” said Greg Westfall, Assistant Special Agent in Charge of the Drug Enforcement Administration.
“Drug trafficking organizations thrive on financial gain and perpetuate criminal violence in our city,” said IRS Criminal Investigation Special Agent in Charge, Stephen Boyd. “IRS Criminal Investigation is committed and determined to work together with our federal, state and local partners to bring justice to the streets of Indianapolis and keep the communities in which we live safe.”
"Today, the Indianapolis Metropolitan Police Department (IMPD) assisted with several drugs raids throughout Indianapolis. We, along with our federal, state and local partners, remain committed to rooting out violent crime and identifying those responsible for harm within our community,” said IMPD Chief Rick Hite. “This inter-agency cooperation has led to successful investigations and prosecutions in the past and sends a clear message. We stand together in our efforts and applaud the community for their tips and leads."
Arrested today include:
Federal Charges :
Alfonso-Pineda-Hernandez, a/k/a Flaco, 30
Nicolas Cazares-Garcia, a/k/a Niko, 28
Aurelio Estrada-Alvarado, a/ka/ Winn, 20
Jose Trinidad- Garcia Jr., 32
Miguel Barragan-Lopez, 35
Mario Gomez-Cano, 20
Javier Sarabia-Gutierrez, a/k/a Cholo, 30
Fernando Paniagua, 22
Cynthia Vergara, 24
Francisa Vasquez-Casimiro, 45
Fugitives:
Jose Araujo-Orduno, a/k/a Cuervo , 18
Oswaldo Rendon, a/k/a Junior, 22
State Charges:
Billy Buchanan, 20, Indianapolis
Cassandra Crank, 24, Indianapolis
Jessica Crank, 23, Indianapolis
Zachary Daniels, 21, Indianapolis
Raul Guitierrez, 29, Indianapolis
Ronald Lee, 47, Indianapolis,
Andres Martinez, 30, Indianapolis
Isreal Vasquez, 27, Indianapolis
Joseph Vasquez, 18, Indianapolis
Still at Large:
Frederico Gonzalez-Ortega, 31, Indianapolis
Johnathon Perkinson, 24, Indianapolis
Shannon Rayas, 42, Indianapolis
Simon Ruiz, 24, Indianapolis
This case was investigated by the Drug Enforcement Administration, Indianapolis Metro Drug Task Force, Internal Revenue Service Criminal Investigation, Homeland Security Investigations, United States Marshal’s Service, Marion County Prosecutors Office, Indiana State Police, Hamilton County Drug Task Force, Carmel Police Department, Beech Grove Police Department, Pittsboro Police Department, Richmond Police Department, Bloomington Police Department and the Lawrence Police Department.
According to Assistant U.S. Attorney Matthew J. Lasher who is prosecuting this case for the government, most federal charges carry a sentence from ten years to life in prison, a $1,000,000 fine and years of supervised release.
An indictment is only a charge and not an indication of guilt. Each defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Monday 16 November 2015
Warren Doctor Sentenced for Unlawful Oxycodone Prescriptions and Health Care FraudRead the Press Release
A physician who practiced in Warren, Michigan, was sentenced to 84 months in prison today for writing prescriptions for oxycodone and other controlled medications without medical justification, and for health care fraud, announced U.S. Attorney Barbara L. McQuade. McQuade was joined in the announcement by DEA Special Agent in Charge Joseph P. Reagan, Special Agent in Charge Lamont Pugh III of the U.S. Department of HHS Office of Inspector General’s Chicago Regional Office, and Special Agent in Charge David P. Gelios of the FBI’s Detroit Field Office. Hussein Awada, 46, of Royal Oak, Michigan, was sentenced by U.S. District Judge Nancy Edmunds. From 2010 throughearly 212,he conspired with James Lyons, a patient “marketer,” and others, to write prescriptions for 80,000 oxycodoneand Roxicodone, plus other controlled medications, in the names of people who were brought to him by Lyons and other marketers, for no medical purpose. The marketers then bought the pills from the “patients” and re-sold them to street dealers. Awada then used the patient data for the patients brought to him by the marketers to submit bills to Medicare and Blue CrossBlue Shield for services that were either never performed or were medically unjustified.Awada caused these same patiensto receive monthly x-rays, and other invasive tests, which were medically unnecessary buthelped to concealhis fraud.Awada admitted that he defrauded Medicare, Medicaid, and Blue Cross of about $2.3 million. In addition to imprisonment, Awada was ordered to pay restitution to Blue Cross and Medicare in the total amount of $2.3million, and was ordered to forfeit various assets and agree to pay the government $2.3 million. McQuade said, "More people die from overdoses of prescription drugs in America than from overdoses of all other drugs combined. We hope that prosecuting the doctors who are putting these drugs on the streets will deter others from contributing to this epidemic.” DEA Special Agent in Charge Reagan stated, “The DEA has made it a priority to address the dangerous practice of illegally diverting prescription medications. Prescription drugs, such as oxycodone and Roxicodone, are controlled substances for a very good reason. If they are abused, they can lead to addiction, illness, or even death. As a physician, Mr. Awada violated the public trust by illegally diverting prescription drugs on to the streets. This sentence makes it clear that the DEA, and our partners in law enforcement, will continue to utilize our investigative techniques to bring to justice those individuals that are responsible for the illegal distribution of prescription medicines.”Upcoming symposium will educate businesses, highlight latest cybersecurity trendsRead the Press Release
FAIRMONT, WEST VIRGINIA – On Friday, November 20, 2015, the United States Attorney’s Office will host the Northern West Virginia Cybersecurity Symposium, an educational forum designed to empower businesses and organizations to more effectively anticipate, mitigate, and respond to cyber threats to their technology infrastructures.
The symposium, which is being co-sponsored by the Federal Bureau of Investigation, will feature presentations by the FBI, the United States Secret Service, the Depart of Justice Computer Crimes and Intellectual Property Section, and the United States Attorney’s Offices for the Southern District of West Virginia, the Western District of Pennsylvania, and the District of Maryland. A reservation is required in order to attend.
“Modern technology and business infrastructures are constantly evolving,” noted United States Attorney William J. Ihlenfeld, II. “That evolution can be an invaluable asset, allowing for improved communication and access to information. On the other hand, increased reliance on rapidly changing technology also increases the risk of cyber threats, including data breaches and stolen information. With a variety of businesses, educational institutions, and health care systems in the region, the Northern District of West Virginia is not immune from these threats. We're excited to be able to provide education on how to recognize and prepare for cyber risks and how to respond when those risks materialize."The symposium will begin at 9:00 a.m. on Friday at the Robert H. Mollohan Research Center in Fairmont. Businesses, corporate representatives, and individuals interested in obtaining additional information or registering should contact the United States Attorney’s Office by calling (304) 234-0100 or emailing [email protected].
Union County, New Jersey, Man Sentenced to 22 Years in Prison for Robbing Multiple New Jersey Banks at GunpointRead the Press Release
NEWARK, N.J. – An Elizabeth, New Jersey, man was sentenced today to 22 years in prison for robbing seven New Jersey banks at gunpoint and attempting to rob an eighth bank at the time of his arrest on July 30, 2012, U.S. Attorney Paul J. Fishman announced.
Claude Williams, 64, previously pleaded guilty before U.S. District Judge Kevin McNulty to Count One, Count Fourteen and Count Fifteen of an indictment charging him with conspiracy to commit bank robbery, bank robbery and using a firearm during a crime of violence. Judge McNulty imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Williams admitted that, between Sept. 26, 2011 and July 30, 2012, he robbed seven banks and attempted to rob an eighth bank, all at gunpoint. He used a similar procedure for each robbery: after entering the bank armed with a handgun and wearing a bandana, hooded sweatshirt or jacket and white gloves, Williams would vault over the counter and demand money from bank tellers at gunpoint.
Williams admitted robbing, or attempting to rob, the following New Jersey banks:
Date
Bank
Location
Sept. 26, 2011
Financial Resources Federal Credit Union
Somerset
Nov. 21, 2011
Somerset Savings Bank
Somerville
Feb. 27, 2012
Provident Bank
Piscataway
April 17, 2012
Provident Bank
Clifton
May 22, 2012
Provident Bank
Piscataway
June 20, 2012
Fulton Bank
Metuchen
July 12, 2012
Unity Bank
Middlesex
July 30, 2012
Unity Bank
North Plainfield
Prior to the July 12, 2012 robbery, an unarmed, off-duty police officer was parked across from the Unity Bank. The officer observed Williams leave the bank, get into the rear of the getaway car and crouch down to hide. After noting the license plate number, the officer followed the car. During the plea hearing, Williams admitted that he exited the getaway car, walked toward the officer’s car and pointed his firearm at the officer, forcing the officer to leave the scene.
On July 30, 2012, Williams was arrested after law enforcement observed him driving in the vicinity of the Unity Bank in North Plainfield on July 27, 2012 and July 28, 2012. He admitted that he planned to rob the bank at gunpoint.
In addition to the prison term, McNulty sentenced Williams to serve five years of supervised release.
Andrea Dorsey, 56, of Plainfield New Jersey, who admitted that she served as a lookout and getaway driver for three of the robberies, was sentenced to 87 months in prison on March 13, 2014. Teresa Webb, 45, of Plainfield, who admitted that she was the getaway driver for one of the robberies, was sentenced to 54 months in prison on May 30, 2013.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, with the investigation leading to today’s sentencing. He also thanked the Somerset County Prosecutor’s Office and the Middlesex Borough, Piscataway, Clifton, Metuchen, North Plainfield and Plainfield Police Departments for their roles.
The government is represented by Assistant U.S. Attorneys Osmar J. Benvenuto and Courtney M. Oliva of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Kenneth W. Kayser Esq., Irvington
U.S. Attorney Sponsors Forum about Protecting the Rights of Service Members in EmploymentRead the Press Release
BOSTON – U.S. Attorney Carmen M. Ortiz, in conjunction with the U.S. Department of Labor, Veteran’s Employment and Training Service and the U.S. Equal Employment Opportunity Commission, sponsored a forum this afternoon on protecting the rights of service members in employment. The program was hosted by the Massachusetts Iraq & Afghanistan Fallen Heroes.
The discussion was attended by city and town counsel, human resources representatives, and private employers, and focused on employers’ obligations to returning veterans under the Uniform Services Employment and Reemployment Rights Act (USERRA). “The United States Attorney’s Office remains steadfast in its support of veterans returning from military service, and we are committed to ensuring that both public and private employers are educated about the provisions of USERRA and the rights of their employees who have been called to serve their country,” said U.S. Attorney Carmen M. Ortiz.
USERRA is a federal law, passed in 1994, that protects military service members and veterans from employment discrimination on the basis of their military service. USERRA applies to members of the Armed Forces, Reserves, National Guard, and other uniformed services. The law ensures that service members: (1) are not disadvantaged in their civilian careers because of their military service; (2) are promptly re-employed in their civilian jobs upon return from duty; and (3) are not discriminated against by employers because of past, present, or future military service. USERRA applies to both public and private employers.
Torrance County Man Pleads Guilty to Violating Federal Firearms LawsRead the Press Release
ALBUQUERQUE – Fredric Dodd, 40, of McIntosh, N.M., pleaded guilty this morning in federal court in Las Cruces, N.M., to being a felon in possession of firearms and ammunition.
Dodd was arrested on Sept. 1, 2015, on an indictment charging him with being a felon in possession of firearms and ammunition. According to the indictment, Dodd committed the offense in Eddy County, N.M., on May 20, 2015. At the time, Dodd was prohibited from possessing firearms or ammunition because he previously had been convicted of numerous felony offenses, including aggravated fleeing a law enforcement officer, receiving or transferring a stolen motor vehicle, larceny, unlawful taking of a motor vehicle and burglary.
During today’s change of plea hearing, Dodd pled guilty to the indictment without the benefit of a plea agreement. At sentencing, Dodd faces a statutory maximum penalty of ten years in federal prison. Dodd remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Roswell office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and is being prosecuted by Assistant U.S. Attorney Maria Y. Armijo of the U.S. Attorney’s Las Cruces Branch Office.
Topeka Man Sentenced to 24+ Years for Producing Child PornographyRead the Press Release
TOPEKA, KAN. – A Topeka man convicted after a jury trial of producing child pornography has been sentenced to 292 months in federal prison, U.S. Attorney Barry Grissom said today.
Jonathan Kearn, 40, Topeka, Kansas, was convicted in May 2015 on one count of producing child pornography, one count of distributing child pornography and one count of possessing child pornography.
During trial, prosecutors presented evidence that the investigation began in April 2013 when Homeland Security Investigations received a report from the Queensland Police Service, Queensland, Australia. An Australian investigator received emails from Kearn in Kansas containing child pornography Kearn produced. The images included photos of a child under six years old.
Grissom commended Homeland Security Investigations, the Topeka Police Department, the Queensland Police Service and Assistant U.S. Attorney Christine Kenney for their work on the case.
Sykesville Business Owner Sentenced to 2 Years in Prison in $11 Million Fraud SchemeRead the Press Release
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Rolf Ramelmeier, age 79, of Sykesville, Maryland today to two years in prison followed by three years of supervised release for mail fraud and money laundering in connection with a 10 year scheme to defraud Northrop Grumman Corporation. Judge Motz also entered an order requiring Ramelmeier to forfeit $11,238,519, and pay restitution of $11,740,925.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation.
Ramelmeier owned and operated JADM. Inc., selling or brokering natural gas sales, out of his residence. JADM’s sole client for many years was the Northrop Grumman Corporation. JADM supplied natural gas to several Northrop Grumman facilities l in Linthicum, Maryland. Ramelmeier obtained the gas from a supplier, such as UGI Energy Services (UGI) or PEPCO. BG&E transported the gas from UGI or PEPCO to the Northrop Grumman facilities. JADM would then invoice Northrop Grumman each month, and Northrop Grumman would pay JADM.
According to his plea agreement, from at least 2003 to December 2013, Ramelmeier overcharged Northrop Grumman for the natural gas delivered to the Linthicum facilities. Ramelmeier concealed this scheme by falsifying invoices and other documents, and by using a false corporate identity and bank accounts that he maintained in the names of shell entities.
Specifically, Ramelmeier represented himself as a gas broker and led the UGI or PEPCO personnel to believe that their company was entering into sales contracts directly with Northrop Grumman when, in fact, Northrop Grumman had no knowledge of these agreements. The contracts required UGI and PEPCO to submit their invoices to Northrop Grumman by mail to a post office box in Roanoke Rapids, North Carolina, and by e-mail to Ramelmeier at JADM. In fact, Northrop Grumman had no such post office box. Rather, at Ramelmeier’s direction, an associate opened that post office box using the name “Northrop Sensors.” The associate regularly retrieved the mail from the post office box, including the invoices from PEPCO and UGI, and forwarded that mail to Ramelmeier. Ramelmeier created invoices on JADM letterhead which charged the real Northrop Grumman for more than the amount of natural gas that UGI or PEPCO had invoiced. Northrop Grumman then paid JADM on the inflated JADM invoices, first by check and then, in more recent years, by wire transfer to JADM’s bank account.
Ramelmeier transferred those Northrop Grumman payments from the JADM account into a bank account that he held in the name of a shell company with no assets or business. He then transferred all or most of the funds again into an account he had opened in the name of Northrop Group Sensor Division (NGS Div.) with an address at the post office box in Roanoke Rapids. Ramelmeier used NGS Div. checks to pay UGI or PEPCO for their original invoices, deceiving those companies into believing that they were being paid by Northrop Grumman. Ramelmeier kept the difference between the original amount invoiced by UGI and PEPCO, and the amount that Northrop Grumman paid based on JADM’s inflated invoice, for his own personal use and benefit.
As a result of the fraudulent scheme, Ramelmeier caused Northrop Grumman to pay him at least $11,238,519 for natural gas that was never actually provided.
In December 2013, Northrop Grumman noticed some unusual charges by JADM for natural gas purportedly used at one of the Linthicum locations, which Ramelmeier falsely claimed was a JADM billing error. Ramelmeier offered to credit Northrop Grumman for the overcharge. Suspicious of Ramelmeier’s explanation, Northrop Grumman hired a consulting firm to analyze the invoices. The consulting firm compared the amounts of gas delivered per JADM’s invoices to BG&E’s records, and determined that between 2003 and 2013, JADM overcharged Northrop Grumman by $11,238,519.
On May 16, 2014, Northrop Grumman representatives confronted Ramelmeier about the overcharges. Ramelmeier falsely claimed that the billing errors occurred because corrupt employees doing the billing for JADM had engaged in embezzlement. In fact, JADM had no employees. Ramelmeier also falsely claimed that he could not provide Northrop Grumman with his billing records because his company computer files were corrupted.
On May 19, the first business day following his confrontation with the Northrop Grumman representatives, Ramelemeier used $82,626.54 of the fraud proceeds to pay off the entire mortgage balance on his residence. The next day, the post office box in Roanoke Rapids was closed.
United States Attorney Rod J. Rosenstein commended the FBI for its work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Kathleen O. Gavin and Richard C. Kay, who prosecuted the case.
Somersworth Man Sentenced to 33 Months on Bank Robbery ChargeRead the Press Release
CONCORD, NEW HAMPSHIRE - Todd Elliott, 22, of Somersworth, New Hampshire, was sentenced in the United States District Court for the District of New Hampshire on one count of bank robbery, announced Acting United States Attorney Donald Feith. The Court imposed a term of 33 months imprisonment, three years of supervised release and full restitution to the victim bank.
Elliott walked into a Citizens Bank in Somersworth, New Hampshire, on November 10, 2014 and gave the teller a note demanding money. The teller gave Elliott a quantity of United States Currency as well as a dye pack resembling a stack of bills. As Elliott ran from the bank, the dye pack exploded which led to his apprehension shortly thereafter.
This case was investigated by the Somersworth Police Department and the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Georgiana L. Konesky.
Silver Spring Contractor Indicted for Scheme to Fraudulently Obtain SBA 8(a) ContractRead the Press Release
Greenbelt, Maryland - A federal grand jury indicted Anthony Nwagbara Daniels, a/k/a “Tony Daniels,” age 59, of Silver Spring, Maryland, today on wire fraud charges arising from a scheme to defraud the United States by fraudulently obtaining a government contract.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Brigadier General Keith M. Givens, Commander Air Force Office of Special Investigations; Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service (DCIS), Mid-Atlantic Field Office; and U.S. Small Business Administration (SBA) Inspector General Peggy E. Gustafson.
Daniels was the Chief Executive Officer of Danison, Inc., a general contracting company he formed in 2004. Danison had no full-time employees besides Daniels, but occasionally employed temporary help for construction-related jobs. On November 14, 2009, Danison was certified by the U.S. Small Business Administration (SBA) as an 8(a) Program business. In order to qualify for the 8(a) Program, businesses must be at least 51-percent owned and controlled by socially and economically disadvantaged individuals. Participants in the 8(a) Program were eligible to bid on sole source government contracts that were reserved for companies in the 8(a) Program.
According to the five-count indictment, from 2011 through 2014 Daniels engaged in a scheme to defraud the U.S. government. Specifically, in 2011, the U.S. Air Force sought a contractor for a demolition contract on Joint Base Andrews (JBA). The indictment alleges that Daniels formed an agreement with Individual A whereby Daniels’ company, Danison, would bid on the JBA demolition contract, and would subcontract with Individual A’s company to perform substantially all of the work on the contract. Individual A’s company had demolition experience, but was not eligible to bid on the project because the company’s annual revenues were too high. On September 29, 2011, JBA accepted Danison’s bid of $1,160,683.43 and awarded the contract to Danison.
The indictment alleges that Daniels emailed Air Force personnel, falsely assuring them that Danison was the prime contractor and was performing the majority of the work on the JBA demolition contract. In fact, Individual A’s company performed the work and Individual A prepared false invoices for electronic submission to the United States through Danison as if Danison had performed the work. Daniels approved and caused the submission of each invoice to the United States for payment. Daniels knew that the invoices were false because they failed to disclose that Individual A’s company performed the work and Daniels’ company was simply a pass-through for the billing. Daniels further knew that the invoices included costs and expenses for payment that were false.
Finally, the indictment seeks the forfeiture of at least $1,158,387.74, including $367,378.82 seized from bank accounts maintained by Daniels.
Daniels faces a maximum sentence of 20 years in prison for each of five counts of wire fraud. An initial appearance has not yet been scheduled.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
The National Procurement Fraud Task Force was formed in October 2006 to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The Procurement Fraud Task Force includes the United States Attorneys= Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. This case, as well as other cases brought by members of the Task Force, demonstrate the Department of Justice’s commitment to helping ensure the integrity of the government procurement process.
United States Attorney Rod J. Rosenstein thanked the Air Force Office of Special Investigations, DCIS, and the SBA Office of Inspector General for their work in the investigation. Mr. Rosenstein praised Assistant U.S. Attorneys David I. Salem and Thomas H. Barnard, who are prosecuting the case.
Sanford Man Sentenced to 50 Years in Federal Prison for Producing and Receiving Child PornographyRead the Press Release
Orlando, Florida – United States District Judge Carlos E. Mendoza today sentenced Douglas Scheels (43, Sanford) to 50 years in federal prison for producing and receiving child pornography. He pleaded guilty on June 18, 2015.
According to court documents, from at least June 2014, and until his arrest on January 11, 2015, Scheels sought out, identified, communicated with, and sexually exploited several minor victims. He enticed two teenage girls from his neighborhood into producing child pornography, and sought out others. Using online communications, Scheels persuaded a minor to produce and send him explicit photos. He also communicated online with at least eight additional minors for the same purpose.
This case was investigated by the Federal Bureau of Investigation, the Seminole County Sheriff’s Office, and the Sanford Police Department. It was prosecuted by Assistant United States Attorney J. Bishop Ravenel.
This is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Philadelphia Man Charged with Theft of Government FundsRead the Press Release
Rannie Henley, Sr., 78, of Philadelphia, Pennsylvania, was charged by Information with one count of theft of government funds, announced United States Attorney Zane David Memeger. According to the Information, the defendant received retirement benefits intended for his mother, after his mother’s death in January 2011 until his fraud was discovered in February 2015. The defendant’s alleged actions resulted in a loss to the government of approximately $60,567.
If convicted, the defendant faces a substantial period of incarceration, up to three years of supervised release, restitution to the government of $60,567, a possible fine, and a $100 special assessment.
The case was investigated by the Social Security Administration, Office of Inspector General, and is being prosecuted by Special Assistant United States Attorney Amanda R. Reinitz.
Peter Foy Sentenced for Bankruptcy FraudRead the Press Release
The United States Attorney for the District of Vermont announced that Peter Foy, 62, of Alburg, was sentenced today in United States District Court in Burlington to one year of probation following his guilty plea to a charge that he concealed assets in his bankruptcy case. U.S. District Judge William K. Sessions III also ordered that Foy pay a fine of $3000.
On June 22, 2015, Foy pleaded guilty to a one-count information charging him with bankruptcy fraud. According to the charging document, in November 2014, Foy filed a chapter 7 bankruptcy petition in the United States Bankruptcy Court for the District of Vermont. The petition sought to discharge all of Foy's unsecured debts. In his petition and accompanying schedules, which Foy swore were complete and accurate, Foy was required to disclose all his assets and liabilities, including any real estate he owned. Foy did disclose the home he owned in Vermont, but not a second house he owned in Quebec, Canada. Foy had acquired sole title to that five-bedroom lakefront property in 2007. Before filing for bankruptcy, Foy had listed the Quebec house for sale at a price of nearly $340,000 (Canadian). Foy also failed to disclose to the Bankruptcy Court that the Canadian property had reportedly generated rental income of $22,500 in 2013 and $20,300 in 2014. A subsequent appraisal of the property showed that it had a fair market value of only about $204,000 and was encumbered by a mortgage of about $175,000.
This case was investigated by the Federal Bureau of Investigation. Foy is represented by Norman Blais. The prosecutor is Assistant U.S. Attorney Gregory Waples.
Pennsylvania Man Sentenced to 37 Months in Prison for Traveling to Engage in Illicit Sexual Conduct with a MinorRead the Press Release
WASHINGTON – Daniel Savage, 33, of Chester Springs, Pa., was sentenced today to 37 months in prison on a federal charge of traveling interstate to engage in illicit sexual conduct with a minor, announced U.S. Attorney Channing D. Phillips, Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Savage pled guilty in September 2015, in the U.S. District Court for the District of Columbia. He was sentenced by the Honorable Ketanji Brown Jackson. Upon completion of his prison term, Savage will be placed on 10 years of supervised release. He also will be required to register as a sex offender for 25 years.
According to the government's evidence, on April 14, 2015, Savage contacted an undercover officer with the FBI's Child Exploitation Task Force, who had posted an ad on a social network site. Over the next several days, Savage engaged in e-mail, phone, and text message conversations with the undercover officer, whom the defendant believed had access to a purported under-age boy. During this period of time, Savage arranged with the undercover officer to meet for the purpose of engaging in sexual acts with the child.
On April 18, 2015, Savage traveled from his residence in Pennsylvania to a pre-arranged meeting place in Washington, D.C. When he arrived at the meeting place, he was arrested.
This case was brought as part of the Department of Justice's Project Safe Childhood initiative and investigated by the FBI's Child Exploitation Task Force, which includes members of the FBI's Washington Field Office and MPD. In February 2006, the Attorney General created Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney's Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov
In announcing the sentence, U.S. Attorney Phillips, Assistant Director in Charge Abbate, and Chief Lanier praised the work of the MPD Detectives and Special Agents of the FBI Child Exploitation Task Force. They also commended the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Joyce Arthur and Tiffany Jones, Victim/Witness Advocate Yvonne Bryant, and Assistant U.S. Attorneys Andrea L. Hertzfeld and Lindsay Suttenberg, who prosecuted the case.
Owners of Home Health Care Agency Found Guilty of Taking Part in $80 Million Medicaid FraudRead the Press Release
WASHINGTON –Florence Bikundi, and her husband, Michael Bikundi, the owners of Global Healthcare, Inc., a home care agency, have been found guilty by a jury of health care fraud, money laundering, and other charges stemming from a scheme in which they and others defrauded the District of Columbia Medicaid program of over $80 million.
The verdicts were announced by Channing D. Phillips, U.S. Attorney for the District of Columbia; Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office; Nicholas DiGiulio, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), for the region that includes Washington, D.C.; James M. Murray, Special Agent in Charge, Washington Field Office, U.S. Secret Service; and Daniel W. Lucas, Inspector General for the District of Columbia.
The verdicts were returned on Nov. 12, 2015, and followed more than four weeks of trial in the U.S. District Court for the District of Columbia. The Honorable Beryl A. Howell scheduled sentencing for Feb. 26, 2016. The charges carry statutory maximums of decades in prison. In addition to prison terms, Florence and Michael Bikundi are subject to a forfeiture money judgment equal to the total proceeds they acquired as a result of this scheme. Judge Howell also will determine if the Bikundis must forfeit $11 million seized from various bank accounts, their home in Mitchellville, Md., and five luxury vehicles.
“Over a period of more than four years, Florence and Michael Bikundi raided the Medicaid program of $80 million through massive and systematic fraud,” said U.S. Attorney Phillips. “The money they stole for their own benefit could and should have been used to help others who were truly in need. Instead, they used the proceeds to finance a lavish lifestyle, including a million-dollar home, a $140,000 Land Rover, a $120,000 Porsche, and a $75,000 Mercedes Benz. This prosecution reflects our determination to protect taxpayer dollars and the citizens of the District of Columbia. Together with our law enforcement partners, we will actively combat health care fraud.”
“These defendants defrauded government health care programs designed to provide for those in need,” said Assistant Director in Charge Abbate of the FBI. “The relentless work of agents, analysts, and prosecutors exposed this conspiracy to steal government funds and brought to justice those responsible. The FBI and our law enforcement partners will continue to work aggressively to prevent and uncover fraud targeting the Medicaid program and maintain the integrity of our nation’s health care system.”
“It’s outrageous that these fraudsters would steal tens of millions of Medicaid dollars meant to provide health care services to poor and disabled individuals just to enrich themselves,” said Special Agent in Charge DiGiulio, of the HHS Office of Inspector General. “Our agency is dedicated to uprooting such fraud schemes and bringing criminals to justice.”
“The recent verdicts in this Medicaid fraud case demonstrate the effectiveness of law enforcement partnerships in the dismantling of criminal enterprises defrauding American health care systems which ultimately impact American citizens,” said Special Agent in Charge Murray of the U.S. Secret Service. “This investigation and the resulting arrests should alert criminals that law enforcement will not cease to pursue them.”
“My Office is fully committed to defending the public from people seeking to defraud the District government,” said Inspector General Lucas of the District of Columbia. “This verdict demonstrates that the OIG plays a lead role, in concert with our District, state, and federal partners, in aggressively investigating and prosecuting health care providers who unlawfully enrich themselves at D.C. taxpayers’ expense. I would like to thank all of the staff from my Medicaid Fraud Control Unit for having tirelessly pursued this case since 2009. Without their tenacity through this long investigation and trial, the District would not be able to recoup the money fraudulently paid to Global and its principals.”
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Florence Bikundi, 52, also known as Florence Ngwe and Florence Igwacho, has been in custody since her arrest in February 2014. She was found guilty by the jury of 12 charges: one count of conspiracy to commit health care fraud; one count of conspiracy to commit money laundering, two counts of health care fraud; one count of Medicaid fraud; and seven counts of money laundering. Michael D. Bikundi, Sr., 63, was found guilty of 10 charges: one count of conspiracy to commit health care fraud; one count of conspiracy to commit money laundering, one count of health care fraud; and seven counts of money laundering.
According to evidence presented at trial, Florence Bikundi, a former nurse, and her husband owned Global Healthcare, Inc. According to the government’s evidence, Florence Bikundi was not entitled to take part in the Medicaid program and fraudulently got approval as a provider. Then, the government’s evidence showed, she and her husband led a scheme to bill Medicaid for services that never were provided – recruiting others, including family members, into the scam, and creating fraudulent paperwork to hide the illegal activity.
The D.C. Medicaid program is funded jointly by District of Columbia tax dollars and federal tax dollars. Medicaid provides for home care services to be performed by personal care aides, working for eligible home care agencies. Doctors or advanced practice registered nurses must examine beneficiaries and authorize them to receive these services. The aides are to follow a plan of care and assist Medicaid beneficiaries in performing activities of daily living, such as getting in and out of bed, bathing, dressing, keeping track of medication, and so forth.
In 1999, Florence Bikundi went by her maiden name of Florence Igwacho. In August 1999, the Virginia Board of Nursing revoked the nursing license of Florence Igwacho. In March 2000, the U.S. Department of Health and Human Services, Office of Inspector General notified Florence Igwacho in writing that she was excluded from participation in Medicare, Medicaid, and all federal health care programs due to the revocation.
Florence Bikundi subsequently concealed her past – namely, the Medicaid exclusion and the revocation of her nursing license - when she applied for a Medicaid provider number for Global Healthcare in June 2009 using the name of Florence Bikundi. She also used three forged signatures on her Medicaid provider application. Florence Bikundi married Michael Bikundi in September 2009.
From August 2009 through February 2014, Florence and Michael Bikundi used Global HealthCare to carry out a massive fraud, the government’s evidence showed. Year after year, the D.C. Medicaid program was billed for personal home health aide services that were not provided to Medicaid beneficiaries. Phony time sheets, patient files and employment files were created. Global Healthcare generated increasing amounts of payments as the years continued, going from roughly $1.35 million in 2009 to $14.27 million in 2011 to $27.16 million in 2013.
According to the government’s evidence, the Bikundis used the proceeds to finance a lavish lifestyle. In just over three years, they spent $1.3 million to purchase and renovate a newly built home. They also used the proceeds for a $140,000 Land Rover, a $120,000 Porsche, a $75,000 Mercedes Benz, a $70,000 Cadillac and a $36,000 BMW.
Seven others earlier pled guilty to charges in the investigation, including Florence Bikundi’s son, and Florence Bikundi’s two sisters.
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Bikundi was among 25 people charged in February 2014 following a wide-ranging investigation that uncovered numerous, separate schemes involving fraud, kickbacks, and false billings in the growing field of home care services for D.C. Medicaid beneficiaries. So far, 23 defendants have either pled guilty or been found guilty of charges. Those pleading guilty include people who worked as personal care aides in the home care industry, patient recruiters who demanded money for access to Medicaid beneficiaries, and others.
The various investigations were conducted by the FBI’s Washington Field Office; the U.S. Department of Health and Human Services, Office of Inspector General; the U.S. Secret Service; the Medicaid Fraud Control Unit of the District of Columbia’s Office of the Inspector General; the Internal Revenue Service-Criminal Investigation; the U.S. Immigration and Customs Enforcement (ICE) Office of Homeland Security Investigations (HSI); the Office of Labor Racketeering and Fraud Investigations, Office of Inspector General, Department of Labor; the Social Security Administration, Office of Inspector General, and the Medicaid Fraud Control Unit of the Maryland Attorney General’s Office. Assistance was provided by the District of Columbia’s Department of Health Care Finance and other agencies.
This case was prosecuted by Assistant U.S. Attorneys Lionel A. André, Anthony Saler, and Michelle Bradford, of the Office’s Fraud and Public Corruption Section. Assistant U.S. Attorney Christopher B. Brown, of the Asset Forfeiture and Money Laundering Section, is assisting during the forfeiture proceedings. Criminal Investigator Nicole Hinson, also of the U.S. Attorney’s Office, was the prosecution’s law enforcement representative during the trial.
Assistance in this case and the other investigations was provided by Arvind K. Lal, Chief of the Asset Forfeiture and Money Laundering Section; Assistant U.S. Attorneys Zia Faruqui, Ted Radway, Michael Friedman, Chrisellen Kolb, and Michelle Zamarin; Financial Analyst Bryan J. Snitselaar; Deputy U.S. Marshal Wayne Rollock of the U.S. Marshals Service; Paralegal Specialists Toni Donato, Donna Galindo, Krishawn Graham, Tasha Harris, Corinne Kleinman, and Kristy Penny; Legal Assistants Angela Lawrence, Jessica McCormick, and Christopher Samson; Litigation Support Specialist Ron Royal, and former Forensic Accountant Maria Boodoo.
Operators of Ponzi involving Non-Existent ATMs that Cost Victims over $135 Million in Losses Sentenced to up to Decade in PrisonRead the Press Release
LOS ANGELES – Concluding one of the largest Ponzi schemes ever seen in Southern California, two men who operated a Calabasas firm at the center of a scam that cost victims approximately $135 million were sentenced today, with one man being ordered to serve nine years, and the other a decade, in federal prison.
Joel Barry Gillis, 75, of Woodland Hills, was sentenced to 120 months in federal prison, and Edward Wishner, 77, also of Woodland Hills, was sentenced to 108 months in prison in relation to a 13-year-long scheme they operated through their company, Nationwide Automated Systems, Inc. (NASI).
Gillis and Wishner used NASI to collect hundreds of millions from thousands of investors who were falsely told their money would be used to purchase profitable automated teller machines that would generate annual profits of at least 20 percent. More than 1,300 investors lost money when the scheme collapsed last year.
United States District Judge S. James Otero sentenced the two defendants, citing the “staggering losses suffered by the victims.” Taking into account the “major magnitude” of the scheme, Judge Otero said he issued sentences less that those called for under the United States Sentencing Guidelines after considering the defendants’ ages, their early guilty pleas in the case and their attempts to help a court-appointed receiver identify remaining assets that could be used to repay victims.
Judge Otero scheduled a restitution hearing for February 1, 2016 and ordered the defendants to begin serving their sentences on December 28.
Gillis and Wishner each pleaded guilty in January to conspiracy, two counts of mail fraud and one count of wire fraud.
“This scheme had a devastating effect on hundreds of victims who lost their hard-earned money to the two defendants,” said United States Attorney Eileen M. Decker. “The lies and deception used by these defendants have earned them long prison sentences. Today’s significant sentences should be a warning to those who make false promises to rob victims of their livelihood and retirement funds.”
According to documents filed in United States District Court, Gillis and Wishner owned and operated NASI, which they claimed would place, operate and maintain ATMs in high-traffic locations, such as hotels, casinos and convenience stores. NASI claimed that it operated approximately 31,000 ATMs and was involved in more than $1 billion in ATM transactions every month.
Victim-investors paid a flat amount – typically $12,000, but in some cases as much as $19,800 – to buy a specific ATM that was to be installed at a specific location. Gillis and Wishner told victim-investors that NASI would lease back the ATMs and pay investors 50 cents for each transaction performed at their particular ATM, guaranteeing annual returns of at least 20 percent on each ATM.
NASI did make monthly payments to investors, but that money came from other investors. While NASI did operate a small number of ATMs – no more than 250, which were owned by the company and not investors – the overall operation was a sham.
“These sentences should serve as a deterrent to other would-be white-collar criminals, yet it cannot rectify the damage done to the lives of over 1,300 victims,” said David Bowdich, Assistant Director in Charge of the FBI’s Los Angeles Field Office. “I strongly urge investors to question and do their due diligence when the stated returns are seemingly too good to be true.”
Gillis and Wishner prevented investors from discovering the fraudulent nature of the business by providing bogus monthly reports to the investors that falsely detailed the supposed performance of the investors’ ATMs. Gillis and Wishner also included a “non-interference” provision in the lease agreements that prohibited victim-investors from visiting the locations where their ATMs were supposedly located.
But, even as the Ponzi was collapsing, Gillis and Wishner continued to raise another $15 million from victim-investors.
“When Gillis and Wishner’s Ponzi scheme collapsed, the victim-investors suffered irreparable financial harm, leaving them struggling to make ends meet, facing retirement bereft of assets, and unable to pay for necessary health care or provide for family members’ medical expenses, education, and other needs,” prosecutors wrote in a sentencing memorandum filed with the court. “These victims included individuals from whom Gillis and Wishner had solicited ‘investments’ even after the Securities and Exchange Commission had served NASI with a subpoena signaling NASI’s imminent shut-down.”
Several victims testified during today’s lengthy sentencing in United States District Court. “Because of their excessive greed, they elected to hurt many people,” one victim said to Judge Otero. Another victim broke down when describing how he and his family has lost their life savings and were forced to sell their home of 20 years, concluding: “We were stripped of our sense of community and dignity.”
This case was investigated by the Federal Bureau of Investigation. The U.S. Securities and Exchange Commission provided substantial assistance in the matter.
The SEC filed a civil lawsuit in relation to the NASI scheme in October 2014 September (see: http://www.sec.gov/litigation/litreleases/2014/lr23106.htm).
Ohio man sentenced in Federal court for role in oxycodone distributionRead the Press Release
HUNTINGTON, W.Va. – Joseph Cremeans, 28, of Chesapeake, Ohio, was sentenced today in federal court in Huntington, West Virginia, to three years and one month in federal prison for conspiracy to distribute oxycodone and oxymorphone, announced United States Attorney Booth Goodwin. Cremeans, who previously pleaded guilty to the federal conspiracy charge in August 2015, admitted to travelling to Georgia on four occasions with other individuals to unlawfully obtain prescription medications. Cremeans then transported the illicit prescriptions back to West Virginia to be sold for profit in Huntington. On each trip, Cremeans admitted to obtaining and transporting more than 100 thirty milligram oxycodone pills.
The successful prosecution of Cremeans and his criminal associates was the result of the investigative efforts of the Huntington Violent Crime and Drug Task Force.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
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North Carolina Man Pleads Guilty to Theft and Embezzlement from the Passamaquoddy TribeRead the Press Release
Contact: F. Todd Lowell
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Stephen E. Crawford, 68, of Beaufort, North Carolina, pleaded guilty today in U.S. District Court to stealing and embezzling funds from the Passamaquoddy Tribe at Pleasant Point.
Court records show that between February 2003 and February 2012, the defendant served as the tribe’s environmental director. Between 2006 and 2012, the defendant fraudulently obtained and stole about $25,000 from the tribe by submitting fraudulent travel expense reports and supporting documentation.
The defendant faces up to five years in prison and a $250,000 fine. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The case was investigated by the U.S. Environmental Protection Agency, Office of Inspector General.Mill Owner Pleads Guilty to Violating the Lacey Act with Purchases and Sales of Figured Maple from National ForestRead the Press Release
A Winlock, Washington wood buyer and his lumber mill pleaded guilty today in U.S. District Court in Tacoma to violating the Lacey Act for trafficking in Big Leaf Maple cut on national forest land, announced U.S. Attorney Annette L. Hayes. Wood buyer HAROLD CLAUSE KUPERS, 48, and his company J & L TONEWOODS admitted purchasing multiple cuts of wood without requiring the seller to show a valid Specialized Forest Products Permit. In his plea agreement KUPERS admits he suspected the wood had been illegally cut in the Gifford Pinchot National Forest. KUPERS faces up to five years in prison, a $250,000 fine and at least $159,000 in restitution when sentenced by U.S. District Judge Benjamin H. Settle on February 8, 2016.
According to the plea agreement, in April 2012, law enforcement officers with the U.S. Forest Service met with KUPERS and specifically informed him that he was required by Washington law to review Specialized Forest Products Permits for all persons from whom he purchased maple. Despite being put on notice, between April 2012 and March 2014, KUPERS continued to purchase figured maple without requiring the harvesters to display a Specialized Forest Products permit. KUPERS then sold this figured maple to purchasers in interstate commerce for total revenues of $499,414. For example one shipment of maple was sold in May 2012 to PRS Guitars in Maryland for $21,395.
Three men who illegally cut the wood were charged with theft of government property and damaging government property for illegally harvesting the maple trees in the Gifford Pinchot National Forest in November and December 2011 and May 2012. Ryan Justice, 28, of Randle, Washington, has pleaded guilty to theft of government property and is scheduled for sentencing on December 7, 2015. James Miller, 36, of Morton, Washington and Kevin Mullins, 56, of Packwood, Washington are scheduled for trial January 12, 2016.
The case is being investigated by the U.S. Forest Service. The case is being prosecuted by Assistant United States Attorney Seth Wilkinson.
Milford Resident Pleads Guilty to Drug and Gun ChargesRead the Press Release
Contact: Joel B. Casey
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Edwin Hamel, 59, of Milford, Maine pleaded guilty today U.S. District Court to conspiring to distribute and possess with the intent to distribute bath salts and to being a felon in possession of firearms.
According to court records, between about January 2012 and March 2014, the defendant conspired with others to distribute the bath salts MDPV and Alpha-PVP in Penobscot County. He obtained the drugs from China by ordering them over the internet. He and others following his instructions wired payments for them to China. The drugs were shipped by U.S. International Express Mail to the defendant and others where they were re-packaged for distribution and sold for $100 or more per gram.
In addition, the defendant possessed two Remington Model 700LH Bolt Action rifles which he acquired in exchange for bath salts. They were recovered by law enforcement agents on March 11, 2014 when the defendant was arrested. The defendant was prohibited from possessing the firearms because he had a prior felony marijuana trafficking conviction.
The defendant faces up to 20 years in prison, a $1,000,000 fine and supervised release of between three years and life on the drug conspiracy charge. He faces up to 10 years in prison, a $250,000 fine and three years of supervised release on the gun charge. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The case was investigated by the Maine Drug Enforcement Agency; the U.S. Postal Inspection Service; the Bureau of Alcohol, Tobacco, Firearms and Explosives; and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.Mexican national sentenced to 14 months in prison for illegally reentering the United StatesRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced that a Mexican national was sentenced last week to 14 months in prison for reentering the country after having been previously deported twice.
Jesus Isas-Medina, 41, of Guadajara, Mexico, was sentenced Thursday by U.S. District Judge S. Maurice Hicks Jr. on one count of illegal reentry after being deported. According to evidence presented at the July 28, 2015 guilty plea, Bossier Parish Sheriff’s deputies arrested the defendant on April 6, 2015. Upon further investigation, it was learned that Isas-Medina had been previously deported in April of 2001 and July of 2012.
The U.S. Immigrations and Customs Enforcement-Immigration Enforcement and the Bossier Parish Sheriff’s Office conducted the investigation. Assistant U.S. Attorney Seth D. Reeg prosecuted the case.
Member of Centralia Meth Conspiracy SentencedRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced that David Leroy Altom, 41 of Centralia, Illinois, was sentenced today to 6 and ½ years (78 months) in federal prison, 4 years’ supervised release, a $200 fine and a $300 special assessment for his role in a Conspiracy to Manufacture and Distribute Methamphetamine in Clinton and Marion Counties. There is no parole in the federal system.
Altom was ordered to self-surrender to the federal prison facility where he is designated for service of sentence.
Information leading to the charges against Altom and the others was obtained in an investigation conducted by the FBI, the Marion County Sheriff’s Office, and the Clinton County Sheriff’s Department, assisted by the Illinois State Police Methamphetamine Response Team, and the Centralia Police Department. The case is being handled by Assistant United States Attorney Kit Morrissey.
Man Pleads Guilty to eBay and PayPal Scheme to Steal Special Agent’s IdentityRead the Press Release
ALEXANDRIA, Va. – Rohit Jawa, 25, formerly of Cincinnati, Ohio, pleaded guilty today to an indictment charging him with eight counts of wire fraud and one count of aggravated identity theft.
Based on court documents, from at least February 2013 through June 16, 2015, the defendant devised and executed a complex identity theft scheme to defraud financial institutions, insurance companies, and others. The defendant managed numerous PayPal accounts that were engaged in a scheme to defraud eBay buyers and eBay’s third-party parcel insurance company. During this period, the defendant repeatedly transferred money representing the proceeds of his fraud scheme from and between accounts he controlled in victim names to accounts he controlled in his own name. In connection with this scheme, the defendant stole the identity of a Special Agent of the United States Postal Service Office of Inspector General (USPS-OIG), and then used that identity to fraudulently gain access to law enforcement databases from which he stole personal identifying information of multiple victims. The defendant then used the identifying information of those individuals to open further fraudulent financial accounts in their names, without their knowledge or consent.
Jawa was indicted by a federal grand jury on Aug. 13, 2015. Jawa faces a mandatory minimum of two years in prison and a maximum penalty of 20 years in prison when sentenced on Feb. 12, 2016. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office; and Zane E. Bridges, Chief of Digital Investigative Services for USPS-OIG, made the announcement after the plea was accepted by U.S. District Judge Anthony J. Trenga.
This case was investigated by the FBI’s Washington Field Office Cyber Task Force. Assistant U.S. Attorney Whitney Dougherty Russell is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15-cr-239.
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Loan Fraud Defendant’s Lies and False Documents Qualify Him for Five Years in PrisonRead the Press Release
Assistant U.S. Attorneys Emily Allen (619) 546-9738 or Mark Conover (619) 546-6763
NEWS RELEASE SUMMARY – August 28, 2015
SAN DIEGO – Solomon Gordon Raymond, also known as Paul Anthony Raymond, was sentenced today to 57 months in custody by U.S. District Judge Roger T. Benitez for lying to banks on a series of business loan applications he used to take almost $500,000.
In addition to punishing Raymond for his fraudulent crimes, Judge Benitez increased Raymond’s sentence for the lies he told during testimony at his May 2015 trial. During the hearing, Judge Benitez described the defendant as “one of the worst conmen I have ever seen.” Raymond was taken into custody at today’s sentencing hearing to immediately begin serving his sentence.
Raymond was convicted by a jury of lying on several loan applications he submitted to Wells Fargo Bank, Bank of America, and the Bank of Escondido. Each application contained numerous false statements and omissions regarding Raymond’s financial and business affairs, criminal history, and other aspects of his creditworthiness. Evidence presented at trial established that Raymond was able to trick the banks into believing that he was a good candidate for the loans by strategically using a second social security number that was unmarred by his bad credit history and multiple prior bankruptcy filings. Indeed, even though he had exited bankruptcy just a few months before his first loan application, Raymond falsely claimed to the lender that he had not undergone bankruptcy. Raymond also lied about his criminal history, falsely claiming to the banks that he had never been arrested or convicted of a crime.
Evidence at trial showed that Raymond told extraordinary falsehoods about his finances. For example, he claimed that his income ranged from $308,841 to $543,933; in fact, his true income was only a fraction of these amounts. To support his false claims he submitted fraudulent tax returns that appeared to have been filed with the IRS. At trial, the government proved that the file stamps on these tax returns were completely fabricated, and that the returns had never been submitted to the IRS.
Raymond also submitted forged bank and brokerage account statements to support his Bank of Escondido application, showing balances close to $400,000 in each account. In fact, the balances in these accounts were substantially lower, with one account even having less than $100.
Just three days after Raymond collected the last payment of his nearly half million dollars from his fraudulent loans, he filed for bankruptcy, attempting to wipe away his obligation to repay these loans. Raymond has left the banks and the U.S. Small Business Administration (which guaranteed the loans) with hundreds of thousands of dollars in losses.
“Mr. Raymond’s string of lies and deceptions not only defrauded these banks – they also victimized the taxpayers whose funds are used to support business loans to deserving small businesses. We are pleased that they jury saw through the additional lies he told at trial, and that he was appropriately punished for his misconduct,” said U.S. Attorney Laura Duffy.
U.S. District Judge Benitez also ordered Raymond to repay the victims $729,192 in restitution.
DEFENDANTS
Solomon Gordon Raymond (a.k.a. Paul Anthony Raymond ) Age: 54
Golden Valley, Minnesota
SUMMARY OF CHARGES
Four counts of False Statement in a Loan and Credit Application, in violation of 18 U.S.C. § 1014.
Maximum penalty: Thirty years in prison, $1,000,000 fine, restitution, and $100 special assessment, per count.
AGENCIES
Federal Bureau of Investigation
Small Business Administration Office of Inspector General
Social Security Administration Office of Inspector General
Treasury Inspector General for Tax Administration
Lilburn Man Sentenced to Prison for Hoax Bomb Threat and Threatening a Federal AgentRead the Press Release
ATLANTA - Maksim Mikhaiov Pikulev was sentenced to seven months in prison after pleading guilty to falsely reporting a plot to obtain bombs that would be detonated at a local Wal-Mart and threatening an FBI Special Agent.
“Law enforcement officers who serve and protect the citizens of this district should not be subjected to threats of violence,” said U.S. Attorney John Horn. “Not only did Pikulev report a false bomb threat, which diverted critical law enforcement resources, but after the FBI agent investigating the matter discovered his claim was a hoax, Pikulev threatened to kill the agent.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “Today’s sentencing in federal court should make it very clear to Mr. Pikulev that the U.S. Government takes bomb threats and threats to its federal agents very seriously. It is hoped that Mr. Pikulev will use his time in prison to reflect on his poor decisions that led to his criminal acts.”
According to United States Attorney Horn, the charges and other information presented in court: On October 17, 2014, Pikulev called Atlanta’s FBI office and falsely reported that two men asked him to build a bomb to blow up a local Wal-Mart. During the investigation, Pikulev stated that he planned to deliver two bombs in his possession to the unknown males and to record the transaction for the FBI. But when an FBI Agent requested to see the bombs, Pikulev refused. The FBI eventually determined that the matter was a hoax.
On December 7, 2014, Pikulev placed a call to the FBI office located in Washington DC. During that recorded call, Pikulev said that he wanted to make a complaint against FBI-Atlanta agents. Pikulev became agitated and angry during the call after he was told to call the Atlanta Division to make his complaint. Pikulev refused to call the FBI Atlanta office and threatened to kill the FBI agent who investigated his bomb hoax.
Pikulev, a/k/a Max, 30, of Lilburn, Ga., has been sentenced to seven months in prison to be followed by three years of supervised release. Pikulev was convicted on these charges on August 14, 2015, after he pleaded guilty.
This case was investigated by the Federal Bureau of Investigation.
Assistant United States Attorney Tracia M. King prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Leader of Portsmouth Bloods Gang Sentenced to 16 Years in PrisonRead the Press Release
NORFOLK, Va. – Theodore M. Vann, aka Flatline, 33, of Portsmouth, who was the highest-ranking member of the Gorilla Mafia Piru, a Bloods gang set based in Portsmouth, was sentenced today to 192 months in prison for conspiracy to distribute heroin and being a felon in possession of a firearm. In connection with this conviction, Vann forfeited two .38 caliber handguns, a 9MM Ruger P95 pistol, and a Hi-Point .40 caliber handgun.
Vann pleaded guilty on June 25, 2015. According to court documents, Vann, together with his fellow gang members, manufactured and distributed far in excess of one kilogram of heroin in Portsmouth from late 2013 to August 2014. Vann conspired with co-conspirators to distribute heroin in the Ghent area of Norfolk, Portsmouth, and other places throughout the Eastern District of Virginia. Vann travelled to New Jersey and to Richmond and Petersburg, Virginia, to purchase wholesale amounts of heroin that were later “cut” with additives in Portsmouth stash houses to increase their volume and profitability.
Vann also purchased wholesale amounts of heroin during the course of the conspiracy from Alonzo Outten, 35, of Portsmouth, who was sentenced to 30 years in prison on Nov. 4, 2015. Vann also purchased wholesale amounts of heroin from members of the Imperial Gangsta Bloods, whose leader, Christopher Smith, 32, of Portsmouth, was sentenced to life in prison on Oct. 30, 2015.
Special Agents from the FBI and officers from the Portsmouth Police Department conducted a series of undercover heroin and firearm purchases from the Gorilla Mafia Piru gang. In one surveillance video recorded in a Portsmouth “stash house,” Vann is seen “cutting” heroin with additives and placing it into gel capsules for street-level distribution. That day, Vann possessed approximately 390 grams of heroin, a large amount of U.S. currency, strainers, a cutting agent, capsules, and plastic bags.
Antwane Williams, the second-highest ranking member of the gang, was sentenced to 10 years in prison on Sept. 24, 2015. Jeffery Henry, an associate of the gang who helped expand its retail market and tested its heroin, was sentenced to 3 years in prison on Oct. 26, 2015.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Mark R. Herring, Attorney General of Virginia; and John S. Adams, Special Agent in Charge of the FBI’s Norfolk Field Office, made the announcement after sentencing by U.S. District Judge Raymond A. Jackson.
This case was investigated by the FBI’s Norfolk Field Office with the assistance of the Portsmouth Police Department. The case was prosecuted by Special Assistant U.S. Attorney John F. Butler, and Assistant U.S. Attorneys Joseph E. DePadilla and Andrew C. Bosse.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:15-cr-60.
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L.A. Man Who Hacked into Email Accounts and Obtained Nude Photos for ‘Revenge Porn’ Website Sentenced to Federal PrisonRead the Press Release
LOS ANGELES – A San Fernando Valley man who hacked into e-mail accounts to steal nude photos that were later posted on a well-known “revenge porn” website was sentenced today to 25 months in federal prison on computer crime and identity theft charges.
Charles Evens, 26, of Studio City, was sentenced today by United States District Judge Dolly M. Gee.
In addition to the prison term, which Evens will begin serving on January 29, Judge Gee ordered the defendant to pay a $2,000 fine, to perform 20 hours of community service and to pay $147.50 in restitution to one of the hacking victims.
Evens pleaded guilty in July to one count of unauthorized access to a protected computer to obtain information for purposes of private financial gain and one count of aggravated identity theft. In sentencing Evens today, Judge Gee imposed a one-month sentence for the computer hacking count and a mandatory two-year term for the identity theft count.
Evens obtained nude pictures that were posted on the revenge porn website, http://isanyoneup.com. The operator of that website – Hunter Moore, 29, of Woodland, California – pleaded guilty in February to the same two offenses that Evens admitted to. Judge Gee is scheduled to sentence Moore on November 30.
On his website, Moore posted nude and sexually explicit photos that had been submitted without the permission of victims. To obtain more photos for the website, Evens gained unauthorized access – in other words, hacked into – Google e-mail accounts. Moore sent payments to Evens in exchange for nude photos unlawfully obtained from the victims’ accounts. Moore then posted the illegally obtained photos on his website without the victims’ consent. Evens admitted that he hacked into email accounts belonging to hundreds of victims.
The investigation in this case was conducted by the Federal Bureau of Investigation.
Jury Finds Bloods Gang Member Guilty of Business Robberies, Weapons ChargesRead the Press Release
Memphis, TN – After a four-day trial, a federal jury found 20-year-old Khalil Davis guilty of two business robberies as well as brandishing and discharging a firearm in relation to a crime of violence. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the guilty verdict today.
According to evidence presented in court, in the early morning hours of January 26, 2014, 20-year-old Khalil Davis, a member of the Bloods street gang, entered a Circle K convenience store on Poplar Avenue masked in a bandana and armed with a firearm. Davis allegedly pointed the gun at the store clerk’s face and took money from both the cash register and safe. He then placed the gun to the female clerk’s head and forced her to perform oral sex on him before fleeing the scene.
On the same day, less than an hour later, Davis, along with a co-conspirator, 32-year-old Antonio Griffin, entered the Marathon Gas Station on Poplar Avenue. After Griffin approached the counter to make a purchase, Davis ran behind the counter and put a gun to the store clerk’s head. A struggle ensued between Davis and the clerk while Griffin grabbed money out of the cash register and fled the store. Davis was able to eventually release himself with the gun. As he exited the store, Davis fired one shot at the clerk.
In July 2015, Davis’ co-conspirator, Griffin, pled guilty to one count of committing a robbery affecting interstate commerce and one count of brandishing and discharging a firearm in relation to a crime of violence. He’s scheduled to be sentenced on Friday, November 20th before Judge Samuel H. Mays.
On Friday, November 13, 2015, a jury convicted Davis on two counts of committing a robbery affecting interstate commerce and two counts of brandishing and discharging a firearm in relation to a crime of violence.
Davis faces up to 20 years imprisonment on each robbery count. He faces a mandatory minimum sentence of 35 years on each weapon count.
Davis is scheduled to be sentenced by Judge Mays on Thursday, February 25, 2016.
The case was investigated by Safe Streets Task Force and the Memphis Police Department.
The case was prosecuted by Assistant U.S. Attorneys Samuel Stringfellow and Kevin Whitmore.
Jefferson County, WV man sentenced for failing to update sex offender registrationRead the Press Release
MARTINSBURG, WEST VIRGINIA – Convicted sex offender Ronald Kisner, II, 30, of Harpers Ferry, West Virginia, was sentenced today to 24 months in prison for failing to properly update his registration status, United States Attorney William J. Ihlenfeld, II, announced.
Kisner was convicted in November 2011 of “Abusive Sexual Assault” in the Northern District of West Virginia. As a result of that conviction, Kisner is required to register as a sex offender. He subsequently moved from West Virginia to Frederick County, Virginia without updating his sex offender registration. He pled guilty in August 2015 to one count of “Failure to Register.”
Assistant U.S. Attorney Attorney Paul Camilletti prosecuted the case on behalf of the government. The United States Marshals Service investigated.
Chief U.S. District Judge Gina M. Groh presided.
Identity Thieves Ordered to Federal PrisonRead the Press Release
HOUSTON – Two area men have been sentenced for their of engaging in a conspiracy to commit bank fraud and aggravated identity theft by using skimming devices on bank ATM machines in and around Houston, announced U.S. Attorney Kenneth Magidson. Bernard Nwachan Akwar, 28, of Houston, and Tokunbo Patrick Aiyewa, 28, of Sugar Land, both had pleaded guilty, admitting to the placement of skimming devices on bank ATM machines in order to obtain information from customer cards.
Today, U.S. District Judge Kenneth M. Hoyt handed Akwar a 24-month-term of imprisonment for his conviction for aggravated identity theft, while Aiyewa was ordered to serve a sentence of 15 months in federal prison for the conspiracy plus a consecutive sentence of 24 months for the aggravated identity theft conviction resulting in a total sentence of 39 months. They were each also ordered to pay $20,957.43 in restituition.
Aiyewa and Akwar were accused of installing skimming devices on bank ATM machines in the Houston area. Surveillance photos had captured images of both defendants at these machines, some of which revealed they attempted to disguise their identity by wearing a wig with dreadlocks. On two occasions in April and May 2014, the two men were observed placing a skimmer on ATM machines which resulted in their ability to obtain information from a total of 24 customer cards on those two days.
Once the skimming device was removed from the ATM, Aiyewa used a computer and encoding machine to download customer banking information and re-encoded used gift cards with the stolen information. Aiyewa and Akwar checked victims’ bank balances removed money from some of the accounts. In addition, the loaded gift cards and other debit cards were used to make purchases in the thousands of dollars.
Agents attempted to arrest Aiyewa and Akwar in the parking lot of the West Oaks Mall on May 21, 2014. Akwar was taken into custody, but Aiyewa attempted to flee. Aiyewa drove his car in the direction of an arresting agent who had to jump out of the way of the vehicle, leaving the parking lot at a high rate of speed. Later, he was found driving a different vehicle and agents followed him. He continued to drive erratically, running numerous stop signs. He was eventually stopped and agents found an unsecured five-year-old child in the back seat.
At the time of their arrests, Akwar was found in possession of numerous pre-paid debit cards that were acquired using the stolen customer information obtained through the skimming device, while agents discovered in Aiyewa’s possession several gift cards as well as a MasterCard debit card in the name of one of the victims. In addition, agents also found the same or a similar wig seen in the photos as they attempted to disguise themselves.
The investigation also revealed that a compromised card number had been used to purchase iPads which investigators observed being passed between Aiyewa and Akwar at the time of their arrest.
Akwar will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future. Aiyewa was allowed to remain on bond until Dec. 11, 2015, when he is required to surrender to federal authorities.
This investigation was conducted by the U.S. Secret Service and its Houston Area Fraud Task Force. Assistant U.S. Attorney Melissa Annis is prosecuting the case.
HCA Settles Allegations of Billing for Unnecessary Lab Tests and Double Billing for Fetal Testing for $2,000,000Read the Press Release
Contact Person: Jennifer Aldrich (803) 929-3000
COLUMBIA, South Carolina ---- United States Attorney Bill Nettles announced today that the United States Attorney's Office for the District of South Carolina with the State of Florida, settled claims of health care fraud with HCA Holdings, Inc. f/d/b/a HCA, Inc. f/d/b/a HCA – Hospital Corporation of America f/d/b/a Hospital Corporation of America and Parallon Business Solutions, LLC, West Florida Regional Medical Center, Inc. d/b/a West Florida Hospital; HCA Health Services of Florida, Inc. d/b/a Regional Medical Center Bayonet Point; HCA Health Services of Florida, Inc. d/b/a Oak Hill Hospital; and New Port Richey Hospital, Inc. d/b/a Medical Center of Trinity (“HCA”).
The United States and the State of Florida contended that HCA submitted laboratory claims for direct count low density lipids (LDL) when the tests were not ordered and/or not medically necessary at four hospitals in Florida: West Florida Hospital; Oak Hill Hospital; Regional Medical Center Bayonet Point; and Community Hospital of New Port Richie (Trinity Hospital). The United States and the State of Florida also contended that HCA submitted claims for fetal biophysical profiles with non-stress tests (CPT code 76818) and additionally submitted another claim for a standalone non-stress test (CPT code 59025) at Community Hospital of New Port Richie (Trinity Hospital) during the period from January 1, 2007 through September 26, 2014.
The investigation began with the filing of a whistleblower lawsuit called a qui tams lawsuit under the False Claims Act. The suit was filed by an employee of HCA and was captioned United States, the District of Columbia, the States of Florida, California, Colorado, Georgia, Indiana, Louisiana, Nevada, Oklahoma, Tennessee, Texas and Virginia ex rel. Kelly Oxendine v. HCA Holdings, Inc. f/d/b/a HCA, Inc. f/d/b/a HCA-Hospital Corporation of America f/d/b/a Hospital Corporation of America, and Parallon Business Solutions, LLC. The False Claims Act allows the government to recover actual damages and penalties of three times the actual damages and up to $11,000 per false claim. This settlement includes repayment of actual damages and penalties.
The False Claims Act allows individuals to file lawsuits with allegations that fraud has been committed against the federal government on behalf of the government. Whistleblowers, referred to as Relators in the False Claims Act, are entitled to share in any recovery received by the government. In this case, the relator will receive 20% of the funds of the settlement or $400,000 plus she is entitled to her costs and attorney fees.
Mr. Nettles said “This office has made a substantial commitment to combating fraud. Our commitment has made this district one of the leaders on behalf of the whistleblowers. We hope that those who commit fraud will recognize that it is our goal to make the consequences more than just the cost of doing business.”
This case was investigated by agents from U.S. Health and Human Resources Office of the Inspector General and the Defense Criminal Investigative Service.
If you suspect Medicare or Medicaid fraud please report it by phone at 1-800-447-8477 (1-800-HHS-TIPS), or E-Mail at [email protected].
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Grade School Teacher Arrested on Child Pornography ChargesRead the Press Release
PLANO, Texas — A 31-year-old Plano schoolteacher has been arrested on child exploitation charges in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Keith Oser, a 5th grade teacher at Legacy Charter School in Plano, was arrested on Friday, Nov. 13, 2015, and appeared today before U.S. Magistrate Judge Don D. Bush for an initial appearance.
Oser has been charged in a federal complaint with distribution of child pornography. Oser will return to court on Nov. 24, 2015 for detention and preliminary hearings.
This case is being prosecuted as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
If you have any information on this case, please contact Victim-Witness Coordinator Judy Daigle at the U.S. Attorney’s Office at 1-800-804-3547. The U.S. Attorney’s Office will take the necessary steps to protect all minors’ identities and confidential information.
This case is being investigated by the Federal Bureau of Investigation and the Plano Police Department and prosecuted by Assistant U.S. Attorney Marisa Miller.
It is important to note that an arrest, indictment, or complaint should not be considered as evidence of guilt and that all persons charged with a crime are presumed innocent until proven guilty beyond a reasonable doubt.
Four sentenced in multi-state heroin trafficking operation based in Baltimore, MarylandRead the Press Release
MARTINSBURG, WEST VIRGINIA – Four individuals were sentenced in federal court today for heroin trafficking, United States Attorney William J. Ihlenfeld, II, announced.
The defendants sentenced today participated in a heroin trafficking scheme based in Baltimore, Maryland. As part of the operation, a large group of individuals repeatedly traveled across state lines to the Baltimore area to procure heroin. The drug was then transported to various locations in Maryland, West Virginia, Virginia, and Pennsylvania for redistribution and sale. The operation was interrupted by a 163-count federal indictment following an investigation by the Eastern Panhandle Drug and Violent Crimes Task Force, a HIDTA-funded initiative, and the Federal Bureau of Investigation.
William Thomas Stine, 40, of Martinsburg, was sentenced today to 33 months in prison. He pled guilty in August 2015 to “Aiding and Abetting Possession with Intent to Distribute Heroin.”
Melissa Dawn Portrey, 47, of Harpers Ferry, West Virginia, was sentenced today to 15 months in prison. She pled guilty in August 2015 to “Aiding and Abetting Interstate Travel in Aid of Racketeering.”
Frederick Smitherman, 37, of Inwood, West Virginia, was sentenced today to 12 months in prison. He pled guilty in August 2015 to “Aiding and Abetting Interstate Travel in Aid of Racketeering.”
Brandon Lee Odell, 33, of Inwood, West Virginia, was sentenced today to 10 months in prison. He pled guilty in August 2015 to “Aiding and Abetting Attempted Possession with Intent to Distribute Heroin.”
In another matter, Timothy William Cook, 30, of Martinsburg, was sentenced today to 30 months in prison for heroin trafficking. He was discovered in May 2014 in possession of heroin in Berkeley County, West Virginia. He pled guilty to one count of “Possession with Intent to Distribute Heroin” following an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Berkeley County Sheriff’s Office.
Assistant U.S. Attorneys Anna Krasinski and Paul Camilletti prosecuted the cases on behalf of the government.
Chief U.S. District Judge Gina M. Groh presided.
Former U.S. Navy Lt. Commander and Catholic Priest Pleads Guilty to Child Pornography ChargesRead the Press Release
WILMINGTON, Del. – A former U.S. Navy Lt. Commander and ordained Catholic priest pleaded guilty in U.S. District Court for the District of Delaware to one count of production of child pornography and one count of distribution of child pornography, announced U.S. Attorney Charles M. Oberly III of the District of Delaware.
John Thomas Matthew Lee, 50, of Millsboro, Delaware, pleaded guilty today before Chief U.S. District Court Judge Leonard P. Stark of the District of Delaware. A sentencing hearing is scheduled for March 2, 2016 at 10:00 a.m. Lee is a registered sex offender following his 2007 conviction in a general court martial of sexually assaulting another Naval officer while serving as a Chaplain at its United States Naval Academy. Lee has been in custody since his November 3, 2014 arrest.
Following a series of CyberTipline reports from the National Center for Missing and Exploited Children, U.S. Immigration and Customs Enforcement-Homeland Security Investigations (ICE-HSI) agents were able to trace to Lee accounts that were being used to upload images of child pornography to several social networking sites. In executing a search warrant at Lee’s residence in Millsboro, agents found tens of thousands of child-pornography images on several of Lee’s electronic devices, including his phone. Via online messenger applications and text messages, Lee also used his phone to induce several juveniles to send him pornographic images of themselves. Lee uploaded at least one of these images to a publicly accessible social media site. He also traded other images of child pornography online with other adults.
U.S. Attorney Oberly stated, “I commend all the investigators and prosecutors who have played a role in bringing this second offender to justice. As a predator focusing his attention on children, Mr. Lee can expect to spend many years, if not the remainder of his life, in prison. The Government’s efforts to rid society of those who exploit and abuse children is of the highest priority and we will continue to seek out these criminals.”
This case is being investigated by the Department of Homeland Security, Homeland Security Investigations, and is being prosecuted by Assistant United States Attorney Edward J. McAndrew.
Former U.S. Navy Lt. Commander and Catholic Priest Pleads Guilty to Child Pornography ChargesRead the Press Release
A former U.S. Navy Lt. Commander and ordained Catholic priest pleaded guilty in U.S. District Court for the District of Delaware to one count of production of child pornography and one count of distribution of child pornography, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Charles M. Oberly III of the District of Delaware.
John Thomas Matthew Lee, 50, of Millsboro, Delaware, pleaded guilty today before Chief U.S. District Court Judge Leonard P. Stark of the District of Delaware. A sentencing hearing is scheduled for March 2, 2016. Lee is a registered sex offender following his 2007 conviction in a general court martial of sexually assaulting another Naval officer. Lee has been in custody since his arrest on Nov. 3, 2014.
Following a series of CyberTipline reports from the National Center for Missing and Exploited Children, U.S. Immigration and Customs Enforcement-Homeland Security Investigations (ICE-HSI) agents were able to trace to Lee accounts that were being used to upload images of child pornography to several social networking sites. In executing a search warrant at Lee’s residence in Millsboro, agents found tens of thousands of child-pornography images on several of Lee’s electronic devices, including his phone. Via online messenger applications and text messages, Lee also used his phone to induce several juveniles to send him pornographic images of themselves. Lee uploaded at least one of these images to a publicly accessible social media site. He also traded other images of child pornography online with other adults.
This investigation was conducted by ICE-HSI Resident in Charge Wilmington, Delaware, with assistance from several other ICE-HSI regional offices to locate and interview the juvenile victims. This case is being prosecuted by Trial Attorney Herbrina D. Sanders of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Edward J. McAndrew of the District of Delaware.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Former PA National Guard Commander Sentenced to Probation for Job SchemeRead the Press Release
PITTSBURGH – A former Guardsmen officer at the 171st Air Refueling Wing in Coraopolis, Pa., has been sentenced in federal court to three years’ probation on his conviction of defrauding the United States Air Force and the Air National Guard of tens of thousands of dollars in military pay and benefits, United States Attorney David J. Hickton announced today.
Senior United States District Judge Gustave Diamond imposed the sentence on Gerard J. Mangis, 61, Glenshaw, Pa.
According to information presented to the court, Mangis, a Colonel and former Mission Support Group Commander at the 171st Air Refueling Wing, conspired with Robert St. Clair, a contract employee at the National Guard Bureau and former tech sergeant at the 171st, to defraud the United States Air Force in false claims for military pay between 2002 and 2011. In 2002, Mangis appointed St. Clair to a position at the 171st where Mangis arranged for St. Clair to be enlisted at the 171st in a “no show” position, and enable him to avoid performing required guardsman duties - such as drill weekends and physical tests - while earning valuable military pay and benefits. In exchange, using his authority at National Guard Bureau at Andrews AFB, St. Clair issued streams of military “workdays” to Mangis, which he used to accumulate excessive active and inactive duty military pay between 2006 and 2011.
Assistant United States Attorney Gregory C. Melucci prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the United States Air Force Office of Special Investigations and the Federal Bureau of Investigation for the investigation leading to the successful prosecution of Gerard J. Mangis.
Former Middle School Teacher Sentenced for Illegal Use of the InternetRead the Press Release
United States Attorney Randolph J. Seiler announced that a Rapid City, South Dakota, man convicted of Attempted Enticement of a Minor Using the Internet was sentenced on November 16, 2015, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Andrew Hiipakka, age 28, was sentenced to 25 years of imprisonment, followed by life of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund. He is also ordered to forfeit an LG cell phone, two Toshiba laptop computers, one Cisco computer modem, one HP laptop computer, one Netger computer router, one Dell laptop computer, and one Apple iPhone.
Between November 2013 and August 2014, at Rapid City, Hiipakka knowingly received and possessed computer files containing images of child pornography.
During the execution of the search warrant, numerous items of evidence were located and seized, including several electronic storage devices and computers. Investigators found thousands of images of child pornography, many of which depicted children under the age of 12 years, and images of violence and sadism. There were also many instances of the Defendant distributing these images to other individuals utilizing the Internet.
In addition, investigators located over one thousand internet “chats” during which the Defendant would receive and distributes images of child pornography. During some of the chats, the Defendant would engage with persons he was told were under the age of 18, and he would convince them to expose their genitalia and perform sexual acts and then distribute those images to the Defendant.
This case also had international implications. Information from this investigation was sent to Homeland Security Investigations’ London attaché office, resulting in an 18-year sentence for a man manufacturing child pornography in England, who had been corresponding with Andrew Hiipakka.
The investigation was conducted by the South Dakota Internet Crimes Against Children Taskforce. Other law enforcement partners involved in the case were the Rapid City Police Department, Pennington County Sheriff's Office, and Homeland Security Investigations. Assistant U.S. Attorney Sarah Collins prosecuted the case.
Hiipakka was immediately turned over to the custody of the U.S. Marshal's Service.
Former Chief Financial Officer Found Guilty in Manhattan Federal Court of Misappropriating at Least $8 Million from Two Healthcare Services CompaniesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that STEVEN RAWLINS, a former Chief Financial Officer to two healthcare services companies based outside Nashville, Tennessee, was found guilty today of engaging in a scheme to defraud that yielded over $8 million in ill-gotten gains. Following an 11-day trial conducted before U.S. District Judge Alison J. Nathan, a jury found that RAWLINS, as the acting Chief Financial Officer for both privately-held healthcare companies, abused his authority to withdraw company funds for payment of legitimate business expenses and tax obligations by, among other things, using such funds to pay personal expenses incurred by RAWLINS, his family, and his associates.
Manhattan U.S. Attorney Preet Bharara said: “As a unanimous jury has found, Steven Rawlins abused his position of trust to steal from the companies whose finances he was entrusted to manage. He siphoned off more than $8 million of company money and spent it lavishly on himself, his family, and his friends, paying for a 12,000-square-foot home, Tiffany jewelry, sports cars and Yankees luxury suites. Now he stands convicted by a jury of federal crimes.”
According to the Criminal Information filed on June 16, 2015, other court documents, and the evidence presented at trial:
In or around 2005, RAWLINS was retained as an outside consultant by a private healthcare services company, which is headquartered in Tennessee (“Company-1”), to assist with financing and accounting matters. RAWLINS’s responsibilities included securing financing for Company-1 and facilitating tax payments. During that time period, RAWLINS was retained by another private healthcare services company, which at the time had operations in Florida and New York (“Company-2”), to perform a similar role. As part of his responsibilities, RAWLINS was authorized to bill both Company-1 and Company-2 for legitimate business expenses incurred in connection with his services. By 2009, RAWLINS had been appointed as acting Chief Financial Officer for both companies.
RAWLINS abused his authority to withdraw company funds and ultimately misappropriated more than $8 million, which he used to pay personal expenses incurred by himself, his family, and his associates. For instance, as part of his responsibilities as a consultant to Company-1, RAWLINS represented that he would make the necessary tax payments owed by Company-1 to the State of Tennessee. From 2011 to 2012, RAWLINS withdrew approximately $850,000 from Company-1’s bank accounts, purportedly in order to pay Company-1’s outstanding tax liabilities to Tennessee. In reality, during that time period, Company-1 owed less than $85,000 in applicable Tennessee state taxes; RAWLINS converted the vast majority of the funds to his own use. Moreover, from 2011 to 2013, RAWLINS caused approximately $4 million to be withdrawn from a Company-1 bank account in order to pay bills associated with RAWLINS’s American Express credit card accounts. Those American Express accounts were in turn used to pay for numerous personal expenses incurred by RAWLINS, or those associated with him, including payments to a real estate development company that built RAWLINS a 12,000-square-foot home; payments for luxury suite access for the Tennessee Titans, Nashville Predators, and New York Yankees; payments for Tiffany jewelry; and payments to car dealerships including Ferrari, Porsche, Maserati, and Mercedes.
* * *
RAWLINS, 58, of Brentwood, Tennessee, was convicted of one count of wire fraud, the sole count in the Information. He faces a maximum sentence of 20 years in prison, a maximum term of three years of supervised release, and a fine of the greatest of $250,000, or twice the gross pecuniary gain derived from the offense or twice the gross pecuniary loss to the victim. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. RAWLINS is scheduled to be sentenced on March 18, 2016.
Mr. Bharara praised the outstanding investigative work of the Federal Bureau of Investigation. He added that the investigation is continuing.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Andrew Bauer and Andrew J. DeFilippis are in charge of the prosecution, and Margaret S. Graham is in charge of the forfeiture aspects of the case.
Former Bartow and Plant City Insurance Agent Sentenced for FraudRead the Press Release
Tampa, Florida – United States District Judge James D. Whittemore has sentenced Heidi Y. Calonge (34) to 18 months in federal prison, followed by 6 months of home detention, for bank fraud, wire fraud, and mail fraud. As part of her sentence, she was ordered to pay $150,371.10 in restitution to her victims. A forfeiture money judgment was also entered in the amount of $150,371.10, representing the proceeds of the fraud. She pleaded guilty on August 13, 2015.
According to court documents, Calonge was employed as the lead agent and manager of a small insurance company located in Plant City – “Express Insurance of Plant City.” In that capacity, she devised a scheme to defraud the owners out of bonus and commission checks from various insurance companies with whom the company did business. Calonge falsely posed as the company’s owner by opening a post office box in a similar corporate name, filing corporate paperwork, registering a similar fictitious name, and opening a personal bank account in that fictitious name in order to deposit checks rightfully owed to the true owners of the company. Calonge spent the fraud proceeds on personal items benefitting herself and her family, and to open another competing insurance agency.
This case was investigated by the U.S. Postal Inspection Service, the Federal Bureau of Investigation, and the Florida Department of Law Enforcement. It was prosecuted by Assistant United States Attorney Kelley C. Howard-Allen.
For-Profit College Company to Pay $95.5 Million to Settle Claims of Illegal Recruiting, Consumer Fraud and Other ViolationsRead the Press Release
The United States has reached a landmark global settlement with Education Management Corp. (EDMC), the second-largest for-profit education company in the country, the Department of Justice announced today. The $95.5 million settlement resolves allegations that EDMC violated federal and state False Claims Act (FCA) provisions by falsely certifying that it was in compliance with Title IV of the Higher Education Act (HEA) and parallel state statutes.
“This historic resolution exemplifies the Justice Department’s deep commitment to protecting precious public resources; to defending American consumers; and to standing up for those who are vulnerable to mistreatment, abuse, and exploitation,” said Attorney General Loretta E. Lynch. “Operating essentially as a recruitment mill, EDMC’s actions were not only a violation of federal law but also a violation of the trust placed in them by their students - including veterans and working parents - all at taxpayer expense. In the days ahead, we will continue working with our invaluable partners at the U.S. Department of Education, through initiatives like the inter-agency task force on for-profit education, to ensure that our nation’s aspiring learners are finding and gaining access to educational opportunities that are right for them.”
The primary allegation was that EDMC unlawfully recruited students, in contravention of the HEA’s Incentive Compensation Ban (ICB), by running a high pressure boiler room where admissions personnel were paid based purely on the number of students they enrolled. In addition to resolving these and other FCA claims, the global settlement also encompasses an investigation by a consortium of state Attorneys General, of consumer-fraud allegations involving deceptive and misleading recruiting practices.
“Now more than ever, a college degree is the best path to the middle class, but that path has to be safe for students,” said U.S. Education Secretary Arne Duncan. “This settlement should be a warning to other career colleges out there: We will not stand by while you profit illegally off of students and taxpayers. The federal government will continue to work tirelessly with state attorneys general to ensure that all colleges follow the law.”
EDMC, which is headquartered in Pittsburgh, Pennsylvania, operates nationwide under four post-secondary school brands: the Art Institutes, South University, Argosy University and Brown-Mackie College. Student enrollment across EDMC’s school brands exceeds 100,000 students.
“Companies cannot enrich their corporate coffers at the expense of students seeking a quality education, or on the backs of taxpayers who are funding our critical financial aid programs,” said U.S. Attorney David J. Hickton of the Western District of Pennsylvania. “Today’s global settlement sends an unmistakable message to all for-profit education companies: the United States will aggressively ferret out fraud and protect innocent students and taxpayer dollars from this kind of egregious abuse.”
The settlement resolves four separate FCA lawsuits filed in federal court in Pittsburgh, Pennsylvania, and Nashville, Tennessee, under the qui tam, or whistleblower, provisions of the act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery.
The United States and five states intervened and actively litigated one of those four whistleblower lawsuits, United States ex rel. Washington, in the Western District of Pennsylvania. The United States’ complaint in intervention alleged systemic violations of Title IV of the HEA’s ICB and parallel state provisions, which prohibit schools from paying recruiters based on their success in securing enrollments. Specifically, the United States and the plaintiff states claimed that from 2003 to the present, EDMC falsely certified to the U.S. Department of Education and various state offices of higher education that it was complying with the ICB, in order to be eligible to receive the federal grant and loan dollars that compose the majority of EDMC’s revenue. In reality, according to the United States’ complaint in intervention, EDMC was running a high pressure sales business and paid its recruiters based only on the number of students they enrolled. As a result of these allegedly false certifications, EDMC improperly enriched itself for more than 10 years with federal and state grant and loan dollars. More broadly, EDMC’s alleged conduct resulted in exactly the problems that Congress sought to curtail when it enacted the ICB: the enrollment of students in programs for which they lacked the necessary skills and qualifications, unsustainable student debt and default rates and schools’ pursuit of profits ahead of a legitimate educational mission.
“Improper incentives to admissions recruiters result in harm to students and financial losses to the taxpayers,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “This settlement shows that by partnering productively, the federal government and the states’ Attorneys General can put a stop to this type of behavior.”
The global settlement with EDMC also resolves three additional federal FCA lawsuits in which the government did not intervene, all involving various violations of Title IV of the HEA by EDMC.
Finally, the global settlement resolves a consumer fraud investigation by a consortium of 40 state Attorneys General, into EDMC’s deceptive and misleading recruiting practices. The consumer fraud settlement requires EDMC to undertake various compliance obligations, including detailed disclosure obligations to students; prohibitions on deceptive or misleading recruiting practices and oversight by an administrator to ensure compliance.
“This civil enforcement action holds EDMC accountable for what we allege were unfair and deceptive recruitment and enrollment practices,” said Iowa Attorney General Tom Miller. “EDMC’s practices were unfair to our state’s students, and they were also unfair to our nation’s taxpayers who backed many of these federal student loans that were destined to fail. This is a rigorous agreement that not only provides some relief to a large number of former students through loan forgiveness, but helps ensure that the company will make substantial changes to its business practices for future students.”
The global settlement amount of $95.5 million reflects EDMC’s financial condition and current ability to pay. The settlement proceeds will be shared among the United States, the co-plaintiff states and the whistleblowers and their counsel in the four FCA cases, and includes funds allocated for the compliance expenses of the state consumer fraud settlement, including the costs of the administrator and the acquisition and use of a sophisticated voice analytics system to record and analyze recruiters’ calls with students. The United States will receive $52.62 million from the settlement, and will pay $11.3 million collectively to the relators in the four qui tam cases.
The FCA lawsuits were handled by Assistant U.S. Attorneys Michael A. Comber, Christy C. Wiegand, Paul E. Skirtich and Colin J. Callahan of the U.S. Attorney’s Office of the Western District of Pennsylvania, Assistant U.S. Attorney Christopher Sabis of the U.S. Attorney’s Office of the Middle District of Tennessee, and Trial Attorney Jay D. Majors of the Commercial Litigation Branch of the Civil Division of the Department of Justice, with assistance from the U.S. Department of Education’s Office of General Counsel and Office of Inspector General.
The cases are captioned United States ex rel. Washington et al. v. Education Management Corp., et al., Civ. No. 07-461 (WDPA); United States ex rel. Sobek v. Education Management Corp., et al., Civ. No. 10-0131 (WDPA); United States ex rel. Laukaitis et al. v. Education Management Corp., et al., Civ. No. 11-601 (WDPA); and United States ex rel. Rainwater v. Education Management Corp., et al., Case No. 3:12-CV-01008 (MDTN). The claims resolved by the settlement are allegations only, and there has been no determination of liability.
For-Profit College Company to Pay $95.5 Million to Settle Claims of Illegal Recruiting, Consumer Fraud and Other ViolationsRead the Press Release
WASHINGTON – The United States has reached a landmark global settlement with Education Management Corp. (EDMC), the second-largest for-profit education company in the country, the Department of Justice announced today. The $95.5 million settlement resolves allegations that EDMC violated federal and state False Claims Act (FCA) provisions by falsely certifying that it was in compliance with Title IV of the Higher Education Act (HEA) and parallel state statutes.
“This historic resolution exemplifies the Justice Department’s deep commitment to protecting precious public resources; to defending American consumers; and to standing up for those who are vulnerable to mistreatment, abuse, and exploitation,” said Attorney General Loretta E. Lynch. “Operating essentially as a recruitment mill, EDMC’s actions were not only a violation of federal law but also a violation of the trust placed in them by their students - including veterans and working parents - all at taxpayer expense. In the days ahead, we will continue working with our invaluable partners at the U.S. Department of Education, through initiatives like the inter-agency task force on for-profit education, to ensure that our nation’s aspiring learners are finding and gaining access to educational opportunities that are right for them.”
The primary allegation was that EDMC unlawfully recruited students, in contravention of the HEA’s Incentive Compensation Ban (ICB), by running a high pressure boiler room where admissions personnel were paid based purely on the number of students they enrolled. In addition to resolving these and other FCA claims, the global settlement also encompasses an investigation by a consortium of state Attorneys General, of consumer-fraud allegations involving deceptive and misleading recruiting practices.
“Now more than ever, a college degree is the best path to the middle class, but that path has to be safe for students,” said U.S. Education Secretary Arne Duncan. “This settlement should be a warning to other career colleges out there: We will not stand by while you profit illegally off of students and taxpayers. The federal government will continue to work tirelessly with state attorneys general to ensure that all colleges follow the law.”
EDMC, which is headquartered in Pittsburgh, Pennsylvania, operates nationwide under four post-secondary school brands: the Art Institutes, South University, Argosy University and Brown-Mackie College. Student enrollment across EDMC’s school brands exceeds 100,000 students.
“Companies cannot enrich their corporate coffers at the expense of students seeking a quality education, or on the backs of taxpayers who are funding our critical financial aid programs,” said U.S. Attorney David J. Hickton of the Western District of Pennsylvania. “Today’s global settlement sends an unmistakable message to all for-profit education companies: the United States will aggressively ferret out fraud and protect innocent students and taxpayer dollars from this kind of egregious abuse.”
The settlement resolves four separate FCA lawsuits filed in federal court in Pittsburgh, Pennsylvania, and Nashville, Tennessee, under the qui tam, or whistleblower, provisions of the act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery.
The United States and five states intervened and actively litigated one of those four whistleblower lawsuits, United States ex rel. Washington, in the Western District of Pennsylvania. The United States’ complaint in intervention alleged systemic violations of Title IV of the HEA’s ICB and parallel state provisions, which prohibit schools from paying recruiters based on their success in securing enrollments. Specifically, the United States and the plaintiff states claimed that from 2003 to the present, EDMC falsely certified to the U.S. Department of Education and various state offices of higher education that it was complying with the ICB, in order to be eligible to receive the federal grant and loan dollars that compose the majority of EDMC’s revenue. In reality, according to the United States’ complaint in intervention, EDMC was running a high pressure sales business and paid its recruiters based only on the number of students they enrolled. As a result of these allegedly false certifications, EDMC improperly enriched itself for more than 10 years with federal and state grant and loan dollars. More broadly, EDMC’s alleged conduct resulted in exactly the problems that Congress sought to curtail when it enacted the ICB: the enrollment of students in programs for which they lacked the necessary skills and qualifications, unsustainable student debt and default rates and schools’ pursuit of profits ahead of a legitimate educational mission.
“Improper incentives to admissions recruiters result in harm to students and financial losses to the taxpayers,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “This settlement shows that by partnering productively, the federal government and the states’ Attorneys General can put a stop to this type of behavior.”
The global settlement with EDMC also resolves three additional federal FCA lawsuits in which the government did not intervene, all involving various violations of Title IV of the HEA by EDMC.
Finally, the global settlement resolves a consumer fraud investigation by a consortium of 40 state Attorneys General, into EDMC’s deceptive and misleading recruiting practices. The consumer fraud settlement requires EDMC to undertake various compliance obligations, including detailed disclosure obligations to students; prohibitions on deceptive or misleading recruiting practices and oversight by an administrator to ensure compliance.
“This civil enforcement action holds EDMC accountable for what we allege were unfair and deceptive recruitment and enrollment practices,” said Iowa Attorney General Tom Miller. “EDMC’s practices were unfair to our state’s students, and they were also unfair to our nation’s taxpayers who backed many of these federal student loans that were destined to fail. This is a rigorous agreement that not only provides some relief to a large number of former students through loan forgiveness, but helps ensure that the company will make substantial changes to its business practices for future students.”
The global settlement amount of $95.5 million reflects EDMC’s financial condition and current ability to pay. The settlement proceeds will be shared among the United States, the co-plaintiff states and the whistleblowers and their counsel in the four FCA cases, and includes funds allocated for the compliance expenses of the state consumer fraud settlement, including the costs of the administrator and the acquisition and use of a sophisticated voice analytics system to record and analyze recruiters’ calls with students. The United States will receive $52.62 million from the settlement, and will pay $11.3 million collectively to the relators in the four qui tam cases.
The FCA lawsuits were handled by Assistant U.S. Attorneys Michael A. Comber, Christy C. Wiegand, Paul E. Skirtich and Colin J. Callahan of the U.S. Attorney’s Office of the Western District of Pennsylvania, Assistant U.S. Attorney Christopher Sabis of the U.S. Attorney’s Office of the Middle District of Tennessee, and Trial Attorney Jay D. Majors of the Commercial Litigation Branch of the Civil Division of the Department of Justice, with assistance from the U.S. Department of Education’s Office of General Counsel and Office of Inspector General.
The cases are captioned United States ex rel. Washington et al. v. Education Management Corp., et al., Civ. No. 07-461 (WDPA); United States ex rel. Sobek v. Education Management Corp., et al., Civ. No. 10-0131 (WDPA); United States ex rel. Laukaitis et al. v. Education Management Corp., et al., Civ. No. 11-601 (WDPA); and United States ex rel. Rainwater v. Education Management Corp., et al., Case No. 3:12-CV-01008 (MDTN). The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Federal Court Sentences California Man to 80 Months for Counterfeit Credit Card SchemeRead the Press Release
DES MOINES, IA - On November 13, 2015, Stephen Thomas, age 49, of Los Angeles, California, was sentenced by Chief District Judge John A. Jarvey to 80 months in prison for his role in leading a sophisticated counterfeit credit and debit card scheme in Iowa in February 2015, announced United States Attorney Nicholas A. Klinefeldt. Thomas was also ordered to pay restitution, to serve 3 years of supervised release following the period of imprisonment, and to pay a $300 special assessment to the Crime Victims Fund. Thomas previously pleaded guilty to the charges of conspiracy, access device fraud, and false statements to a federal official.
The investigation of this matter began as a result of a suspicious package that was delivered to a hotel in Des Moines. Law enforcement determined that the package contained counterfeit debit and credit cards that had been mailed from California to Thomas and others. Thomas and three co-defendants—Ronald Barre, Jr., Nakika Carter, and Richard Foust—left California together to execute the scheme across the Midwest. The group used counterfeit debit and credit cards to withdraw money from casinos in Minnesota and Iowa, and to purchase items at retailers. The counterfeit cards contained legitimate debit and credit card information encoded onto the strips of the back of the cards, but were embossed with the names of the defendants. 2
Thomas traveled with a California driver’s license in another person’s name, and provided a false name, date of birth, and social security number to law enforcement. At the time of his arrest, Thomas had an active arrest warrant for having escaped from federal custody.
Thomas’s co-defendants were previously sentenced for their roles in the scheme. Foust, age 58, received 24 months imprisonment; Carter, age 39, received 20 months’ imprisonment; and Barre, age 50, received 32 months’ imprisonment. All co-defendants are jointly and severally liable for restitution.
This investigation was conducted by the United States Postal Inspection Service, the United States Secret Service, the Des Moines Police Department, the Bloomington, Minnesota, Police Department, and the Iowa Department of Public Safety Division of Criminal Investigation. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Federal Court Permanently Bars a Michigan and Illinois-Based Liberty Tax Service Franchisee from Preparing Federal Income Tax ReturnsRead the Press Release
The U.S. District Court for the Eastern District of Michigan has permanently barred a Liberty Tax Service franchise owner and his companies from preparing federal tax returns for others, the Justice Department announced today.
The civil injunction order prohibits Syed N. Ahmed and his companies from acting as federal tax return preparers and from owning, operating, or profiting from tax-return preparation businesses. Ahmed and his companies agreed to the entry of the injunction but did not admit the allegations in the civil complaint against them.
According to the complaint, Ahmed and his businesses operated at least 10 Liberty Tax Service franchise locations in the Detroit, Michigan, and Chicago, Illinois, areas. The complaint alleged that the defendants’ employees prepared federal income tax returns containing false information in order to illegally generate higher tax refunds or higher refundable credits for their customers. The government alleged that defendants improperly obtained inflated tax refunds and refundable credits for customers by preparing tax returns that included, among other things, false or inflated Schedule C (Profit or Loss From Business) income and expenses, bogus dependents, false filing statuses, improper education credits and false itemized deductions.
The lawsuit further alleged that the defendants’ Liberty Tax franchises prepared 17,759 federal income tax returns between 2010 and 2013. According to the complaint, defendants’ conduct cost the U.S. Treasury $2.8 million, based on audit adjustments the Internal Revenue Service (IRS) made to tax returns for 2010 to 2013 prepared and filed by Ahmed’s Liberty Tax Service franchises. The total harm to the government could be much higher, the complaint states.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2015. The IRS has some tips on its website for choosing a tax preparer and has launched a free directory of federal tax preparers. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.